Heres a great article from the Daily Gleaner: Wow, how social media can take one persons views and make it a headline without any truth in it. CBC News posted a story on Nov. 1 which says: Child tax changes will hurt, not help, Calgary mom says. Federal government announced plans to scrap Child Tax Credit, boost Universal Child Care Benefit. It leads off saying some families in Calgary say they will be worse off after the federal government announced this week that changes had been made to the Canadas Child Tax Benefit. Well, I have had calls at home from friends and family, and so far this morning I have had three phone calls telling me they are not able to make ends meet without the Canada Child Tax Benefit. This is the funds available to parents with children under the age of 18 depending on their income. I had one lady call me, crying as she read these comments online from CBC. When I told her that was not true she said CBC would not report it if it was not true, and I had to send her the summary about the changes, highlighting what is going to happen. What is being eliminated is not the child tax benefit, but the child tax credit - or what we normally refer to as the child amount. The elimination of this amount may reduce the tax savings produced by the enhanced UCCB benefits, but it will not put you in a worse position than you were before. Even though I wrote about this last week, I think it is a big enough issue to bring it up again. On October 30, 2014, Prime Minister Stephen Harper announced a package of tax changes for families that will include a limited form of income splitting for couples with children, the replacement of the child amount with enhanced UCCB benefits and increased claims for child care expenses. The income splitting measure, which is referred to as the family tax cut, will take effect for 2014. The remaining measures will take effect for 2015. The family tax cut will allow a couple with at least one child under the age of 18 to claim a non-refundable tax credit equal to the amount that would be realized by transferring up to $50,000 of taxable income from the higher-income to the lower-income spouse or common-law partner. However, the maximum claim will be limited to $2,000. The credit will only be available to couples who are both residents of Canada at the end of the year. It will only be available to couples who are not separated due to a breakdown in their relationship at the end of year and for a period of at least 90 days commencing in the following year. However, it will be available in the event that one of the spouses or common-law partners dies during the year. The credit will only be available where the couple has a child under the age of 18 at the end of the year who ordinarily resides with them throughout the year. However, according to the Department of Finance backgrounder, this requirement could be met if the parents of a child remarry or enter into new common-law partnerships during the year. The requirement will also be met if a child is born, adopted or dies during the year. Effective for 2015, the Universal Child Care Benefit will be enhanced for children under the age of six as it will be increased from $100 to $160 per month; and a new benefit of $60 per month will be paid for children over the age of five and under the age of 18. According to the Department of Finance backgrounder, the enhancements will take effect as of January 2015 but will not be reflected in monthly payments until July 2015. This means that a retroactive adjustment will be included with July cheques. Taxpayers who are already registered for the Canada child tax benefit or related provincial benefits will not have to reapply in order to get the enhanced UCCB benefit. However, there will undoubtedly be taxpayers whose income is too high to get the Canada child tax benefit who have not bothered to apply. In order to get their $60 per month they will have to complete Form RC66 Canada Child Benefits Application. The existing tax treatment of UCCB benefits will apply to the enhanced benefits. In the case of couples, they will therefore remain taxable in the hands of the lower-income spouse. In the case of single parents, they will have the option of including the payments in their own income or in the income of a dependant for whom they are claiming the amount for an eligible dependant. Effective for 2015 the non-refundable tax credit for children under 18 at the end of the year will be eliminated. However, the family caregiver supplement to the child amount will remain in effect. So you can see they have made changes, but the Canada Child Tax Benefit will still be issued every month, and has not been eliminated. Doug Northrup He is a tax professional, small business and corporate specialist and tax advisory member for H&R Block in Moncton. He can be reached at [email protected] © 2014 The Daily Gleaner (Fredericton)
Posted on: Sat, 22 Nov 2014 18:52:00 +0000