FAQ about the new family tax credits

We’ve received a flood of questions about the new family tax credits and what these changes mean. We answer the most common questions below.

1. This is really confusing. I don’t know what I’m receiving and I’m worried!

Unless your family income has increased significantly, these changes mean you will receive more money, not less. The government certainly hasn’t made this easy to understand with all the similarly named credits. Here’s a summary:

  • Universal Child Care Benefit (UCCB). This is the $100 per child under six credit that’s paid on the 20th of each month to all families, regardless of income. In 2015, this credit is increasing to $160. You will now also receive $60 for children between the ages of six and 18.
  • Canada Child Tax Benefit (CCTB). This credit is also paid out on the 20th of the month, however this credit is based on your particular situation. Not all families receive this credit as it depends on your family income. This credit is sometimes referred to as the “child tax credit” or the “family allowance”. This credit isn’t changing and you will continue to receive it if you’re eligible.
  • Federal amount for children under 18. This is something you claim on your tax return that impacts your tax refund. This is not a monthly payment. This credit will be there in 2014 but will be eliminated in 2015.

2. Are the monthly payments I’m receiving going away?

No, the monthly payments you’re receiving are not going away. Two amounts are paid out on the 20th of the month: the UCCB and the CCTB. The UCCB is being expanded; nothing is happening to the CCTB.

3. Am I going to get less money than I was before?

No. The UCCB is increasing by $60 per month per child under 18. This is an additional $720 per year. While the “federal amount for children under 18”, which you claim on your tax return, will be eliminated, it was only worth $340 per year.

4. I have a child over six, what’s going to happen to me?

You will start receiving the UCCB ($60 per month per child) in 2015. The first seven months will be paid out in July ($420) and starting in August you’ll receive $60 per month. If you receive the CCTB, you will continue to receive it if you’re eligible.

5. What about the tax credit I get for my disabled child?

You will still be able to claim the family caregiver amount for your child.

6. Does this impact any other credits (e.g., spousal amount, arts credit, etc.)?

If we didn’t mention the credit, it hasn’t been impacted by these changes.

7. Does income splitting mean that my child’s other parent will be able to decrease his or her income and pay less child support?

No. The “income splitting” that was announced is only “notional” or “effective” income splitting. It just means that your child’s other parent might get a tax credit if his or her spouse is in a lower tax bracket.

8. My spouse and I are in different tax brackets. Should we do income splitting or should she claim me as a dependant?

You will claim both on your return as they are not mutually exclusive.

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