Child Tax Deductions

[c-kat]

Hello,

I recently had a baby and would like to know what income tax deductions there are for children?

Best,
c-kat

[GettingThere]

Daycare costs
Medical expenses (in addition to yours)
If you are single, then you are allowed a dependent deduction (line 105)

The federal govt removed most of the children deductions and replaced them  with a more generous monthly allocation, non taxable

You might also want to check if there are provincial deductions (in Quebec, for example, sports & artistic activities can be deducted (the federal government cancelled that deuction in 2017).

[RichMoose]

Hello,

I recently had a baby and would like to know what income tax deductions there are for children?

Best,
c-kat

You can deduct child care and medical expenses within certain limits. Also there are quite extensive disability credits/deductions for children who are disabled.

For the most part the biggest benefit comes from the Canada Child Benefit. Sign up for it ASAP. It's a non taxable benefit that is linked with similar provincial programs. Don't forget to check out provincial low income parental benefits that you could be eligible for depending on your family income level.

Edit: Looks like Getting There just beat me to the punch!

[Prairie Stash]

My Province auto enrolls you into the CCB when you get the birth certificate and SIN. All three are done before being released from hospital, its efficient. It took us less then 10 minutes to fill out all the forms, no mailing or driving required. If your province is the same, there's not much to do at first.

I get daycare receipts at year end, pro tip - pay for January daycare on Dec. 30. It'll front load that month into this years taxes. If you're ever over the limit the credits get wasted, front loading moves it into a partial year; possibly 2017 or 2018 in your case, whatever the partial year is.

[joonifloofeefloo]

Related, the RDSP for kids with disabilities and the RESP for all kids rock. Set up account ASAP.

[dycker1978]

There are also a couple of additional deductions that you can take on your TD1 and your provinces TD1.  I recommend using these.  there is no point giving the government a interest free loan with your income tax withholdings.

[Goldielocks]

Thinking Long term:
When your child is older, if you have a side hustle, you can pay him / her and it is a business deduction (not just a credit).   As they are under 18 and your dependent there are no employer taxes like CPP and EI.  They pay taxes, but the first $11k is tax free for everyone.    They do have to do legitimate work for your business.  My DD completed some webpage work, for example, or filing / cleaning out the office documents, etc.

Today:
The other none income tax benefits are for services like city-subsidized recreation activities (swimming / dance / skating lessons), library card, parent and tot drop in,  terrific kids splash parks and reduced cost transit.    We take these for granted, but when I lived in the USA, all of these were quite expensive,  3x as much or non-existent close by.     Our kid budget dropped by about $100 per month when we moved back to Canada, because of this, and they were involved in more activities... so  actively look for it and take advantage of it.

[Stasher]

Thinking Long term:
When your child is older, if you have a side hustle, you can pay him / her and it is a business deduction (not just a credit).   As they are under 18 and your dependent there are no employer taxes like CPP and EI.  They pay taxes, but the first $11k is tax free for everyone.    They do have to do legitimate work for your business.  My DD completed some webpage work, for example, or filing / cleaning out the office documents, etc.

We have always paid the kids out of our business for a basic allowance and a bit of work. Although isn't this what the big controversy in the new business tax laws that were just proposed by the Liberals? I think it talked more about capital gains and family trusts though..

[Reggie]

You can deduct child care and medical expenses within certain limits. Also there are quite extensive disability credits/deductions for children who are disabled.

For the most part the biggest benefit comes from the Canada Child Benefit. Sign up for it ASAP. It's a non taxable benefit that is linked with similar provincial programs. Don't forget to check out provincial low income parental benefits that you could be eligible for depending on your family income level.

Edit: Looks like Getting There just beat me to the punch!

The CCB is great and can really help out especially if you end up in FI.  With reported family income under $30,000 you can get up to $6,400 per child.