Some examples of child care benefits include the spousal amount, uccb, and cctb. Last week, I answered a reader question regarding whether it was better financially for one spouse to stay at home with the kids, or for both parents to be working.
From within the answer that I put together, I mentioned the Spousal Amount, Day Care Expenses, Universal Child Care Benefit (UCCB), and the Canada Child Tax Benefit (CCTB). I didn’t get to explain these terms in any great detail, so for you new or soon to be parents, this may be the article for you!
- The spousal amount is a tax credit that can be transferred to the higher income spouse providing that the low income spouse has very little or no income.
- The maximum credit for 2006 is $7505 (net income < $751) but decreases as the amount of net income for the low income earner increases. When the low income spouse reaches $8,256 in net income, the spousal amount is eliminated.
- This taxtips.ca calculator will account for the spousal amount.
Day Care Expenses
- In the case that you and your spouse decide to go back to work and need to put your child in day care, it can get expensive. The bright side is that up to $7,000/child/year can be claimed under the lower income spouse.
Universal Child Care Benefit (UCCB)
- The UCCB is the one of the Tory promises of universal child care. This taxable program provides $100/month/child for families with children under the age of 6.
- UCCB income can be taxed in the hands of the lower income earner.
Canada Child Tax Benefit (CCTB)
- CCTB is a tax free monthly payment to parents with children under the age of 18.
- This amount received depends on the number of dependents, the province, the family net income and marital status.
- You can use this nifty CCTB Calculator to figure out your situation.
NEW! Effective July 1, 2007, $2000 / child (under 18)/ family can be claimed.
- This is a FEDERAL tax credit, meaning you get $2000 x 15.5% = $310/child/family. I haven’t’ seen any mention of the provinces matching this credit, if you hear anything, let me know!
I hope this helps some new parents out there, I know that I have learned a lot from the research. I guess it’s time to have kids now? :)If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).