“Christmas in July”: it was a popular phrase in the summer of 2015. A federal election was nearly upon us and the old Conservative government had decided to increase our child benefits. The increase in the benefits was paid out on July 20, 2015 and was retroactive to January 2015 so those of us with kids got a nice, lump-sum amount deposited into our bank accounts. It was very kind of our outgoing government to have given us a parting gift, and for that we thank them! 🙂
Fast forward to July 2016…but not too fast because you might miss this year’s early Christmas present from our new Liberal government! Next week, the new Liberal “Canada Child Benefit” will begin its monthly deposits to Canadian parents…but not everyone will be receiving a delivery down their chimney from Santa Justin (insert “ho ho ho” sound here). This time around, the more your family earns, the less you’ll be receiving (unlike the old UCCB that everyone got a piece of). Check out my last blog post for details of how much you’ll be getting or use the CRA’s simple calculator or more complex calculator to do the math for your family.
Now, for those of you who read my blog regularly, you know I’m not just writing to deliver good news. So I won’t keep you in suspense any longer! Along with your new child benefits come some cuts to credits that many of us have gotten used to, some of which might even affect our spending habits where our kids are concerned. For example, if your child was enrolled in an organized sport last year, you may have decided to spend that $500 because you were getting 15% of that back when you filed your taxes! Well, that 15% will be gone as of 2017 and the same goes for arts programs for kids, and, starting in January 2017 we’ll be losing the education and textbook credits that we’ve held near and dear to our hearts for many years. For those of you unfamiliar, these are the credits that are based on the number of months a person is in school “full-time” or “part-time” on the T2202 form from CEGEPs, Colleges, trade schools and Universities. So, losing those credits kind of sucks for many parents out there, especially those of you with teenagers. Plus, you have to deal with teenagers! Sorry.
Another victim of the cuts in credits is the now-famous “Family Tax Cut”, AKA income splitting (for married/common-law couples with kids). To that cut, I say good riddance, for reasons I chatted about in a previous post…but mostly because it fully discriminated against married or common-law families who don’t have children. But I digress.
As they say, “with great power comes great responsibility”…or in this case, “with great child benefits comes a great need to save that extra money” (it’s doubtful that Spiderman will use my version anytime soon). If you’re among those lucky middle-classers who will be receiving a monthly raise in their benefits, make sure you put some cash aside to pay for those sports, arts activities and school (post-high-school, that is)! With all those missing credits next tax season, your bill could be a bit higher than in the past. As for us Quebecers, well that’s a whole different story (goodbye forever $7 daycare!) that we’ll chat about in a near-future post. In the meantime, wherever you are in Canada, enjoy that extra cash and…..Merry Christmas in July! Happy Summer!
The Funny Accountant
If you like what you read, please like my Facebook page and/or follow me on Twitter! And, as always, if you have tax questions, need advice on your personal taxes, corporate taxes or anything else accounting or business related, please contact me (Mitch Kujavsky), AKA The Funny Accountant, either by phone at (514) 833-1158 or by e-mail at email@example.com.
Also, for a witty and insightful read, check out the wifey’s blog. It’s funny and good.