Tax time is coming and a new survey is out that shows many Canadian parents are missing out on claiming some child-care-related expenses to the tune of thousands of unclaimed dollars.
The survey goes on to say only seven per cent of Canadians plan to take advantage of child-care-related tax credits and deductions. Without claiming these expenses, parents with children under the age of seven could be losing up to $8,000, while parents of kids under 16 could be missing out on up to $5,000. Now that’s some serious cash!
HERE ARE SOME TIPS IF YOU ARE A PARENT:
1. Child-care expense deduction: Parents can claim this if they hire caregivers or enrol their kids in day nursery schools and centres, educational institutions that provide childcare services, day camps and boarding schools or overnight camps.
2. Canadian child benefit: This is a tax-free monthly payment made to families who are eligible, to help them with the cost of raising a child under the age of 18.
3. National child benefit: This supplements the Canada child benefit. It provides support to low-income families. Benefits are paid over a 12-month period and are adjusted every July, based on information from your previous year’s return.
4. Child disability benefit: This benefit is for families who care for a child under the age of 18 who has a severe or prolonged physical or mental impairment.
Remember, however, that the federal government has eliminated the tax credits for fitness and art as 2016 was the last year parents could take advantage of it.
But if you still want to find a way to claim your child’s fitness and art activities despite the change, one trick experts say is that parents find child-care providers with art and fitness programs incorporated in the child-care fees. That will ensure that children still participate in the activities, while parents get the benefit as it can be claimed as part of the daycare expense.
OTHER TOP TIPS:
1. Make sure to get a receipt for any services your child may gets.
2. If a nanny is hired to care for your children, it can qualify to be claimed as child care. Also any summer camps your child may attend when their regular child-care providers are not available is also partly deductible based on the child’s age.
3. If a child is going through post-secondary education, tuition can be claimed by a child – or if there is not much benefit on the child’s return then it can be transferred to a parent. So if your child is in college or university, make sure they file a tax return.
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