Section 2 – Individuals and Families
Canada Child Benefit
The CCB is a non-taxable monthly benefit paid to low- and middle-income families to help them pay for the needs of their children. The maximum annual benefit amount is $6,639 per child under 6 years of age and $5,602 per child aged 6 to 17 years. Benefit amounts start to be reduced when the family income reaches $31,1202.
To qualify, an individual has to be the father or mother of the child, live with him/her and be the person primarily responsible for his/her care and education. Parents who share custody of a child more or less equally may receive one-half of the benefit each.
The CCB is paid over a 12-month period from July of a particular year to June of the following year. It is calculated based on the information in both parents’ tax returns for the preceding year3. Accordingly, it is important for them to file tax returns even if they have no income. Payments cease automatically the month following the child’s 18th birthday. Parents must inform the CRA of any marital status change that occurs during the year.
2 Benefit amount and threshold indexed annually. 3 Therefore, the entitlement to the CCB paid for the period from July 2019 to June 2020 is based on the 2018 income. To estimate the benefit amount you are entitled to, including provincial benefits administered federally, visit: https://www.canada.ca/en/revenue-agency/services/child-family-benefits/child-family-benefits-calculator.html.
An additional amount up to $2,832 is payable in respect of a child who qualifies for the disability credit.
Family Allowance – Quebec
Since 2019, the CAP is renamed “Family Allowance”. It is a non-taxable credit managed by Retraite Québec (Quebec Retirement) payable in advance in January, April, July and October of the year, or on the first of each month upon the taxpayer’s request4. The Family Allowance is made up of a universal payment and additional assistance to low- and middle-income families. A child’s income has no impact on the amount granted. To be entitled to the Family Allowance, both spouses must have filed a Quebec tax return whether or not they have income.
4 This request may be made on-line on the Retraite Québec website at: https://www.rrq.gouv.qc.ca/en/services/services_en_ligne/soutien_aux_enfants/Pages/changement_frequence_sae.aspx.
[email protected]5 is a tool offered on the Internet site of Retraite Québec that helps you estimate the amount of the Family Allowance you are entitled to receive.
5 Available at: http://www.rrq.gouv.qc.ca/en/enfants/naissance/paiement_soutien_enfants/montant.htm.
The following table shows the credit to which families are entitled, based on the number of children under the age of 18 in the family, as well as the income threshold that makes them eligible only for the basic minimum amount.
|2019||Family Allowance||Income threshold at which Family Allowance reaches basic minimum6
|Reduction threshold for couple
Reduction threshold for single-parent family
Monthly supplement for disabled child
|Monthly supplement for disabled child with exceptional care needs8||
6 Indexed annually. 7 Indexed annually. Amount granted regardless of family income. 8 This amount is in addition to the supplement for a disabled child and the amount of assistance depends on the child’s limitations. If the child is eligible for both levels, only the higher amount is granted. 9 Amount granted retroactively since April 1, 2019. An application must be submitted to Retraite Québec in the 11 months following the end of a given month (deadline extended to May 10, 2020 for an application for the months of April and May 2019).
Supplement for the purchase of school supplies
The supplement for the purchase of school supplies, in the amount of $102 in 2019, is granted for each child aged 4 to 16 (17 for a disabled child) on September 30th of the year. The amount, which is indexed annually, is added to the July Family Allowance payment and is granted regardless of the individual’s family income.
Ontario Child Benefit and Income Supplement
The Ontario Child Benefit can reach a maximum amount of $1,434 per year per child under 18 years old. The benefit is paid with the CCB in a single monthly payment. It is reduced when family net income exceeds $21,887.10
10 Benefit amount and income threshold for 2019; indexed annually.
Child Tax Benefit and Earned Income Supplement – New Brunswick
The government of New Brunswick pays families a non-taxable benefit of up to $250 a year for each child under age 18. The benefit is reduced when family net income exceeds $20,000. Some families may also be entitled to a supplement. These payments are included in the CCB so that there is only a single monthly payment.
Low income families with children of school age may also be eligible for the New Brunswick school supplement.
Child Care Expenses
Child care expenses can be claimed if they are incurred by both parents of a family or the head of a single-parent family in order to be employed, carry on business, go to school or carry out research or similar work. These expenses entitle the taxpayer to a federal deduction, a deduction in New Brunswick and a refundable tax credit in Quebec. In Ontario, child care expenses give entitlement to a child care expense deduction and a refundable tax credit.
Eligible child care expenses
Eligible child care expenses are those paid to an individual, a day-care centre,11 a boarding school or a day camp in respect of a child under 16 years of age (at a time in the year) or a child of any age who is mentally or physically disabled. The deduction may generally be claimed by the parent who earns the lower income. There are some exceptions, including if the parent with the lower income is at school. When custody is shared, the child care expenses are considered in the income tax return according to the amounts paid by each parent.
Child care expenses incurred when one of the parents is looking for work are generally eligible.
11 Including, for federal purposes, parental contribution and the additional contribution required, where applicable, from parents whose children attend a subsidized early childhood centre or school day care in Quebec.
Child care deduction – Limits
The child care deduction cannot exceed two-thirds of the earned income of the person claiming it and is limited to the following amounts:
|Child||Annual ceiling||Per week of boarding school or day camp||If a parent is at school|
|Per week of full-time study12||Per month of part-time study13|
|Under age 7||8,000||200||200||200|
|7 to 15 years||5,000||125||125||125|
|Suffering from severe disability||11,000||275||275||275|
12 Minimum of three consecutive weeks and 10 hours of courses per week. 13 Minimum of three consecutive weeks and 12 hours of courses per month.
Earned income includes employment or business income, an allowance received under the Act Respecting Manpower Vocational Training and Qualification, a taxable scholarship and the net amount of research grants.
Dividend income is not considered earned income in calculating the child care deduction. Consequently, if the parent who can claim the deduction only has dividend income, child care expenses cannot be claimed.
Child care tax credit – Quebec
In Quebec, the child care tax credit rate varies between 26% and 75%14 based on the family net income.
Generally, eligible expenses are calculated based on the same criteria as those for the federal child care expense deduction, provided the maximums for child care expenses paid amount to $9,660, $5,085 and $13,22015 in respect of a child under age 7, a child between the ages of 7 and 15 and a disabled child respectively. Eligible expenses are not limited by the parents’ earned income.
Quebec does not recognize parental contributions set by the government (including the additional contribution) to early child care centres, home child care centres or school day care as child care expenses. However, certain related expenses, such as registration fees for the child, amounts paid to reserve a spot in a child care centre, certain additional amounts paid for pedagogical days or a parent’s late fees are eligible. The contribution payable for subsidized child care services offered by schools during spring break is also eligible for the child care credit.
Child care expenses include costs incurred during the period during which the individual or his/her spouse receives QPIP benefits or EI benefits related to a birth or adoption. Moreover, child care expenses reimbursements received by a taxpayer as part of an active employment measure established by Emploi-Québec are not taxable in Quebec; the expenses reimbursed are, however, not eligible for a child care credit.
Households subject to a decrease in their child care tax credit due to an increase in their income from work can benefit from some tax relief under the tax shield (see point 5 of this section).
Parents may receive part of the refundable child care tax credit to which they are entitled in advance provided certain conditions are met. The caregiver must confirm the rate and the number of days the child will be cared for during the year. In addition, the estimated credit must be more than $1,000 (unless the parent is entitled to a work premium of more than $500 for the year).
Where two spouses believe they are entitled to the tax credit for the year, only one of them can make a request for the advance payment.
If you have children over 18 years of age, they could be paid to take care of their brothers and sisters. Provided the conditions are met, amounts paid for these services are deductible as child care expenses while there would be little or no tax on these amounts in the caregiver’s hands.
14 For 2019, the credit is 75% if the net family income does not exceed $35,950 and is gradually reduced to 26% when that income exceeds $160,220. 15 Ceilings indexed annually, respectively $9,500, $5,000 and $13,000 in 2018.
Additional contribution for subsidized child care services – Quebec
In Quebec, taxpayers who have children in a subsidized child care service must pay an additional contribution based on the family income, in addition to the basic contribution. The basic rate is payable directly to the child care service and the additional contribution is payable at the time of filing tax returns. Individuals may ask their employer to increase their source deductions for this purpose (see Section I).
Since 2019, the additional contribution amount is reduced annually in anticipation of its complete elimination as of 2022. Accordingly, for 2019, the basic rate is $8.25 per day if the 2018 family income is not greater than $78,320. The maximum rate of $21.45 per day is reached when the family income is $166,320 or more. The additional contribution is reduced by half for the second child and is not payable in respect of the third child and subsequent children.
Childcare access and relief from expenses tax credit – Ontario
Since 2019, Ontario offers a childcare access and relief from expense tax credit. This refundable tax credit is calculated on child care expenses eligible for the child care expense deduction. It can be up to $6,000 per child under the age of 7, $3,750 per child aged between 7 and 16 and $8,250 per child with a severe disability, based on the income used to determine the child care expense deduction.16 As of 2021, this tax credit will be available through advance payments.
16 For 2019, the credit rate is 75% when the family income is not more than $20,000 and is gradually reduced to nil when that income is more than $150,000.
Tax Credit for Children’s Activities — Quebec
Quebec grants a refundable tax credit equal to 20% of maximum expenses of $500 (maximum credit of $100) incurred to register a child who is at least 5 but not yet 16 years of age, in an eligible sports, artistic, cultural, recreational or developmental activity. An additional credit of $100 is granted for a child who is at least 5 but not yet 18 years of age if the child has a disability, provided that a minimum amount equal to 25% of the general expenditure ceiling amount per child ($125) was incurred for eligible expenses. The tax credit is offered to parents whose family income does not exceed $138,525.17
17 Amount indexed annually.
Credits can be claimed for expenses incurred to adopt a minor child. While eligible expenses vary depending on the jurisdictions, they generally include legal and administrative expenses relating to the adoption, certain travel and living expenses, document translation fees, mandatory fees paid to a foreign institution and amounts charged by a certified adoption body.
In general, the credit must be claimed the year the adoption order in respect of the child is issued or recognized by Canadian authorities.
The following table summarizes the details of the federal, Ontario and Quebec adoption credits:18
18 No credit in New Brunswick. 19 Indexed annually.
Quebec allows a refundable credit to offset a maximum amount of $20,000 of eligible infertility treatment costs by 20% to 80%. The credit rate varies according to the income and conjugal situation of the individuals incurring the costs. Subject to conditions, advance payments of this tax credit can be requested.
Eligible expenses include amounts paid for prescribed drugs provided they have not or may not be reimbursed. Certain restrictions apply to expenses paid with regards to in vitro fertilization. Moreover, costs incurred for artificial insemination are not eligible for this credit. Such expenses may, nevertheless, be deductible as medical expenses.
For federal purposes, fertility treatment expenses are eligible for the medical expense credit (see Section IV).
Family Caregiver Tax Credit – Federal
Parents who have a child under 18 years of age with a prolonged and indefinite impairment are eligible for the Canadian caregiver tax credit (see Section IV).
This document is up to date as of August 1, 2019 and reflects the status of legislation, including proposed amendments at this date.