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Thread: New family tax credit

  1. #16
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    I'm a little worried about how this will affect me come income tax time? It sounds like I will lose a lot by the time I factor in the complete loss of the non refundable credit for children under 18? Anyone know exactly how this works? I think the credit is about $2000 per child per year so that's $8000 more that I will be taxed on each year and I'll only receive $240 per month from the UCCB.
    Leslie




  2. #17
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    And ummm they are gettinf rid of the cctb monthly payment too I believe
    Mom to DS - 9.5 years old
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    Quote Originally Posted by MamaM View Post
    And ummm they are gettinf rid of the cctb monthly payment too I believe
    No. It's a separate one that they are getting rid of. It's a once yearly credit that's in with your tax return (if you get one) that they are getting rid of

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    Oh thank god
    Mom to DS - 9.5 years old
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    does anyone have a link for this by chance to explain whether it replaces CCTB or not? I have heard some people say it does and others say it doesn't. If it replaces CCTB I am in big trouble as the CCTB is currently more than half our monthly income. Like many lower income Canadians we rely on this to live.

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    The first link in this thread explains it pretty good

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    ah okay that's a relief. I read several articles that said it would replace the Canada child tax credit and I thought they were referring to cctb.

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    Quote Originally Posted by Leslie View Post
    I'm a little worried about how this will affect me come income tax time? It sounds like I will lose a lot by the time I factor in the complete loss of the non refundable credit for children under 18? Anyone know exactly how this works? I think the credit is about $2000 per child per year so that's $8000 more that I will be taxed on each year and I'll only receive $240 per month from the UCCB.

    I believe that will be eliminated or the 2015 tax year, so you have time to figure it out. I think I read the tax credit was worth about $350 per child (this will depend on your income level), and the new UCCB is $720 / year for children 6-17. I think it will still be taxable, depending on income you should still be ahead or at the very least even. You may get an advantage for the 2014 tax year, and then it will level off for the 2015 tax year.

    Assuming a overall tax rate of 26% for federal & provincial (tax rates are leveled and I am not doing the full math), you will have an additional $10880 of taxable income ($8000 + $2880 (UCCB)), assumed taxes = $2828. So, in this situation you are not ahead, but you are not behind either. I would hope that the gov't had some pretty smart tax experts figuring this stuff out to make sure families would not be at a disadvantage. It looks nice for many, for for others it really will not mean much for their actual money to spend.
    Last edited by Pomegranate; 11-10-2014 at 10:09 AM.

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    There is an article that mentions that the "child tax" was maximum $380 per child per year. I think it might be the daycare tax that you fill out, where if you pay daycare but made over $5,000 and make a low/lowish income then you got money back each month.
    When I first moved here I had to pay the full daycare cost for 2 months before subsidy kicked in, and then filed that paper, so after next taxes I got about $10/month for the next 12 months (I assume this is what it is they are getting rid of).

    I also get about 3/4 of Child Benefit and rely on it to pay basic bills.
    Last edited by melissawilliam; 11-10-2014 at 07:02 PM.

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    The child tax credit was only beneficial if you actually owed money at the end if the year. It equates to about $332 child as it was a non refundable credit.
    Mom to DS - 9.5 years old
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    Quote Originally Posted by MamaM View Post
    The child tax credit was only beneficial if you actually owed money at the end if the year. It equates to about $332 child as it was a non refundable credit.
    A non-refundable tax credit reduces your taxable income, so as long as you are paying taxes it may be beneficial. It doesn't matter if you owe or not when you do your taxes, it reduces your taxes owing which can equal a refund of taxes already paid but were not owed (which is how most tax refunds are generated). If you are in an income bracket where you do do not pay taxes, you can't get a refund from it.

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    There are a couple of changes that will put some extra cash in everyone's pockets if they have kids under the age of 18. No one should end up paying MORE tax but when you get this cash will change. You may not get as big a refund each year but instead will get the cash monthly.

    The higher UCCB payment of $60/month per kid will be paid out monthly (starting next July). This higher amount will be taxable just like it currently is .... but you won't be able to hide it with the non-refundable Child tax credit which was a credit of just over $2K for each child under 16. Up until this announcement, the UCCB payments were rarely taxable to most families ... the income was added to the return then offset by the non-refundable Child tax credit (sometimes called the kid under 16 credit). So .... now everyone will have higher taxable income on the return but at the end of the year the tax you will pay is less than the increase in your monthly cheque (even at the highest rate of 48% where taxable income over $130K ish). In other words, if you're in the highest income bracket and you have two kids you'll have an extra ...... $180 for the year . So less of a refund in April but more cash in your pocket each month - even if it's just a little bit more per month.

    The CCTB doesn't change and isn't impacted - and it's never taxable. It won't be impacted income splitting either because it's based on family income.

    Fitness credits federally increased to $1,000 per child (more if child qualifies for the disability tax credit) which means an extra $75 in refunds whether you owe any tax or had any taxable income in the year.

    Daycare expense deduction increased to $8,000 under 6 and $5,000 under 16. Most full time centers charge more than this per year for young ones but it helps .... the daycare expenses can only be deducted by the lower income earner in the family so if you stay home with no income but still have your child(ren) in day care even part time - this won't help you as you have no income to deduct from.

    The family income splitting - is a wacky formula that hasn't been finalized but from what I've seen so far but it won't help much unless there is around a $75K difference in your incomes. Anything less than that and the "savings" is nominal. Less than a $50K difference between what you and your spouse earn and maybe around $200 benefit - so something but not a huge break.

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    Thanks strongmommy, that is a great explanation! And, unfortunately is what I assumed, it is playing with the money so that it 'looks' good, but is not really a huge increase in cash for many families, but I guess it is something.
    Last edited by Pomegranate; 11-11-2014 at 07:24 PM.
    strongmommy and Michelleshere like this.

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    The income splitting was introduced by the PC party. This was their main platform last election. The pcs brought it before Harper 6x before they would see it and vote on it. Why? Because election time is coming. So don't be fooled. As always this istypical of the fluff being pulled over your eyes.
    Had you voted PC last election we would have had this in place years ago. Rather then seeing he benefit is in 2015.
    ~Who ever said "don't cry over spilt milk" has never been a breast feeding mother with latch issues standing over a puddle



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    I like that the income splitting really helps out families with a stay-at-home-parent.

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