Family Tax Deductions: What Can I Claim?

Being a mom has been the most incredible experience of my life so far – even including all those sleepless nights. It’s also very expensive, and according to a 2015 study by MoneySense Magazine, it costs on average $13,366 per year to raise a child to 18 years old. To offset these costs, the Canadian Revenue Agency provides a number of ways for families to save money through deductions and credits.

Child Care Expense Deduction
Child care is a deduction from gross income that you may make if you use daycare or babysitters, while you work or go to school. There are annual limits that vary with each child’s age and, if your child has a disability, a higher limit may be available. Any disability must be approved by the CRA to claim benefit.

You can claim the following childcare expenses incurred in 2018:

Caregivers such as nannies and babysitters
Day nursery schools and daycare centres
Educational institutions that provide childcare services
Day camps and day sports schools with a primary goal of childcare
Boarding schools, overnight sports schools, or camps where lodging is involved
You may also claim advertising or placement agency costs incurred to locate a childcare specialist. Click on this link for more information on other childcare expense deductions.

What important to note is that if you pay an individual person – such as a nanny or babysitter – for childcare, you must provide their Social Insurance Number as well as all related receipts. A good tip to follow is asking for these ahead of time instead of at the end of the year.

As a Canadian taxpayer, you can claim (up to) the following amounts:

$8,000 per child under 7
$5,000 per child between 7 to 16
$11,000 for disabled, dependent children who qualify for the disability tax credit
$5,000 for a disabled child over 16 who does not qualify for the disability tax credit but is still dependent on you
For a boarding school or overnight camp that provides childcare, you may only claim the following amounts (up to):

$200 per week for a child under 7
$125 per week for a child 7 and 16
$275 per week for an eligible disabled child
Transferred and Pooled Credits
In some cases, tax credits may have no effect on a taxpayer’s return, such as when they are already in refund status. In the case of families, many of these credits — all or the surplus portion — may be transferable to another family member.

The transit pass tax credit can be claimed individually or for any dependent children under 19 years old. However, this credit was eliminated as as June 30, 2017.

The tuition tax credit can be claimed or carried forward by the student, or may be transferred to the student’s parent, grandparent or spouse, or student’s spouse’s parent or grandparent.

Medical expenses may be declared on family totals. To qualify, expenses must exceed the current level set by the CRA or 3 percent of net income, whichever amount is lower.

 

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