Background
Background
Theresa Lo, CPA Chartered Professional Accountant 陳盧韻詩注册會計師事務所
Theresa Lo, CPAChartered Professional Accountant陳盧韻詩注册會計師事務所

Part 1: Personal Federal Taxes Changes

3.  Canada Child Benefit

 

With the elimination of income splitting for couples with children and the children’s fitness and arts tax credits, Trudeau government introduced the new Canada Child Benefit in its Budget 2016, which received Royal Assent on December 15, 2016.  This Canada Child Benefit (CCB) replaces the old Universal Child Care Benefit (UCCB), National Child Benefit Supplement (NCBS), and Canada Child Tax Benefit (CCTB).

 

CCB is a non-taxable monthly payment made to eligible families with children under the age of 18.  The total amount of CCB that a parent receives may also include the child disability benefit and any related provincial and territorial programs.

 

Before including child disability benefit and other related provincial and territorial programs, each family may receive a maximum of $6,400 per year ($533.33 per month) for each eligible child under the age of 6 and a maximum of $5,400 per year ($450.00 per month) for each eligible child between the age of 6 to 17.  These amounts start to reduce when the adjusted family net income (AFNI) is over $30,000.  The reduction is calculated as follow:

 

        AFNI

# of

Eligible Children

< $30,000

Between $30,000 and $65,000

>$65,000

1

Full Amount

7% reduction of AFNI

7% reduction of AFNI between $30,000 and $65,000 + 3.2% reduction of AFNI over $65,000

2

Full Amount

13.5% reduction of AFNI

13% reduction of AFNI between $30,000 and $65,000 + 5.7% reduction of AFNI over $65,000

3

Full Amount

19% reduction of AFNI

19% reduction of AFNI between $30,000 and $65,000 + 8% reduction of AFNI over $65,000

4 or more

Full Amount

23% reduction of AFNI

23% reduction of AFNI between $30,000 and $65,000 + 9.5% reduction of AFNI over $65,000

 

The child disability benefit (CDB) provides additional financial assistance to eligible families who have one or more children under the age of 18 who qualify for the disability tax credit (DTC).  Each family may receive a maximum of $2,730 per year ($227.50 per month) for each child eligible for the DTC.  The amount starts to reduce when the adjusted family net income (AFNI) is over $65,000. 

 

                      AFNI

# of Children

eligible for the DTC

Less than or equal to $65,000

> $65,000

1

Full Amount

3.2% reduction of AFNI

2 or more

Full Amount

5.7% reduction of AFNI

 

Each province and territory also have their provincial and territorial child benefit and credit programs.  For BC, there are two benefits relating to children – BC early childhood tax benefit and BC family bonus. 

 

The first CCB payment started on July 20, 2016.

 

In Summary:

 

Canada Child Benefit

 

1.  Replace previous UCCB, NCBS and CCTB

2.  Maximum $6,400 for eligible child under the age of 6 and $5,400 for eligible child between the age of 6 and 17

3.  These amounts start to reduce when the adjusted family net income (AFNI) is over $30,000

a.  $30,000 - $65,000:  reduction of 7% of AFNI

b.  > $65,000:  reduction of 3.2% of AFNI over $65,000

c.  The above rates will change when the family has more than 1 child.

4.  Child Disability Benefit – Additional monthly benefit included in CCB

a.  Up to $2,730 per year

b.  The benefit is reduced when income is > $65,000:

i.  3.2% reduction for 1 child

ii. 5.7% reduction for 2 or more children

 

For more information, please contact us @ 778-374-1865 or info@theresalocpa.ca

 

Note:  All information relating to the benefit above is available from CRA website.

 

By Theresa Lo, CPA, CGA

January 2, 2017

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Call us at +1 604 639-3229+1 604 639-3229 with any questions or to schedule an appointment.

 

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Theresa Lo, CPA

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Burnaby, British Columbia

V5H 4H2

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