Ask the Accounting Expert – Jennifer Naeau
If you haven’t already heard, the government has implemented a number of tax changes for 2014/2015.
The Family Tax Cut
This credit is available to couples with at least one child under the age of 18. It allows the higher income spouse to transfer up to $50,000 to the lower income spouse or common law partner. It results in a maximum non-refundable tax credit of $2,000. Both spouses must be Canadian residents and not living separate and apart for a period of at least 90 days in the following year. The child must ordinarily reside with the individual claiming the credit. Either spouse or common law partner can claim the Family Tax Cut but not both.
Universal Child Care Benefit
The Universal Child Care Benefit (UCCB) will be increasing as of January 1, 2015. Parents will now receive a benefit of $160 per month for each child under the age of 6, up from the previous $100 per child per month. The government is also expanding the UCCB to include children age 6 through 17. Whereas there was no benefit previously for this age group, parents will now receive a benefit of $60 per month per child.
Child Care Expense Deduction
Effective for 2015, the maximum child care expense amounts will increase to $8,000 for children under 7, $5,000 for children 7-16 and $11,000 for children eligible for the Disability Tax Credit.