Tax Tip: CANADA CHILD BENEFIT

A well-publicized aspect of the Liberal election platform was the replacement of the Canada Child Tax Benefit, National Child Benefit Supplement, and the Universal Child Care Benefit with the Canada Child Benefit.

This new program commenced in July 2016, with payments determined from the family€s 2015 personal income tax returns. The family income used in the calculation consists of the net income (not including Universal Child Care Benefits and Registered Disability Savings Plan Income) of the person primarily responsible for the care and upbringing of the child, plus that person€s spouse or common-law partner, but not the net income of the child.

Families may be eligible for the maximum annual benefits of $6,400 per child under age 6 and $5,400 per child age 6 to 17. Benefits will be phased out based on family income in excess of $30,000 with a reduced phase-out rate applied to incomes over $65,000, as follows:

Phase-Out Rates (%) 1 7.0 3.2 2 13.5 5.7 3 19.0 8.0 4 or more 23.0 9.5

For example, the payment for a family with $75,000 of income and a 4-year old would be: $3,630 = $6,400 € (10k (income over 65k) X 3.2%) € ((65k-30k) X 7.0%).

A further benefit of $2,730 per disabled child may apply, with the phase-out rates generally aligning with the Canada Child Benefit.

For a tool which will calculate an individual€s entitlement to the Canada Child Benefit, go to http://www.budget.gc.ca/2016/tool-outil/ccb-ace-en.html. For a tool which will consider additional benefits available for those with children, go to http://www.cra-arc.gc.ca/benefits-calculator/.

Action Item: Ensure that your children are registered in order to receive payment. If you were previously receiving the Canada Child Tax Benefit, you are already registered.