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| Changes Proposed for 2014 Mean Tax Benefits for Families |
NEW TAX CHANGES
BENEFITING FAMILIES
Earlier this month there were a
number of changes proposed expected to take effect in 2015 for the benefit of families.
Two-thirds of the families benefiting these changes will be low and middle-income
earning families.
Income Splitting Will
be Available for Families
The new Family
Tax Cut will allow income splitting for families as of the 2014 tax year,
when previously this has only been available for seniors. This will allow a
higher-income spouse to transfer up to $50,000 of taxable income to a spouse in
a lower tax bracket. For example for a family that has a stay at home parent or
one who works part time, and allowing them to divide the income for tax
purposes. The credit will provide up to $2,000 of tax savings for couples with
children under the age of 18, effective for the 2014 tax year.
Enhanced Universal
Child Care Benefit replaces the Child Tax Credit and Increases UCCB
The Child Tax Credit is a $2000
tax credit applied to line 367 for a parent with a child 17 or under. This
credit is being eliminated at the time of filing the 2014 tax return and
replaced with the new Enhanced Universal Child Care Benefit as of January 2015.
The credit being replaced can be worth up to $365 per year for each child to
the parent claiming it, but only if their income is taxable. The credit goes to
waste for many low income parents or single parents who don’t have enough
income to make use of it.
The Enhanced
Universal Child Care Benefit would increase the current $100 per month to $160
per month for children under 6 years old and will provide $60 per month for
children 6 to 18. This benefit would apply regardless of income. In a year
$1920 could be received per child.
While this change to the
Universal Child Care Benefit is effective January 1, 2015 it cannot be paid
until July 2015 after Royal Assent has been received. Until July 2015 regular
payments will apply.
If you have applied for the UCCB
or Child Tax Benefit in the past nothing further is required to receive this benefit,
however if you have never applied you should submit form
RC66.
Fitness Tax Credit Increased
While the Arts Credit remains at
$500 per year, per child. The Fitness
Tax Credit has increased to a maximum of $1000 for each child up to age 16
per year.
In addition to the increase of
the current limit in the 2014 tax year, as of the 2015 tax year, the credit
will be changed to a refundable credit. Meaning that the credit will result in
a refund of a portion of the amount paid when no tax is owing rather than going
to waste if the income is too low to owe any tax.
Increase to Child
Care Expense Maximum
The
current Child
Care Expense limits for every age group will increase by $1000 per year.
Contact us at Pain
Free Tax & Bookkeeping Service Ltd. to arrange a free analysis of how these
changes may benefit your family.
