The federal child benefit is a government of Canada program to help families defray the cost of raising children. If you have a child under the age of 18, read on to learn more about whether you are eligible and how much you could get.
What is the child tax benefit in Canada?
If you qualify, you will receive a tax-free monthly payment. It can be deposited directly into your bank account. Once you have applied, and the government determines that you are eligible, it will be paid every month until your child is 18.
Who is eligible for the child tax benefit?
You or your spouse must be Canadian citizens or permanent residents. Or you can be a protected person or Indigenous. In addition, you must meet all of the following requirements:
- Live with a child under the age of 18
- Be primarily responsible for the child’s care
- Be a resident of Canada for tax purposes (in other words, residing in Canada or paying Canadian taxes)
What if you are separated or divorced? In this case, the parent with whom the child lives primarily is eligible for the tax benefit. If you have 50-50 shared custody, you can split the money with your former spouse.
To learn more about the eligibility rules for the child allowance Canada, you can visit the CRA website.
How much is the child tax benefit?
The Canada child benefit amount varies depending on your income. For a child under the age of 6, the annual maximum baby tax benefit you can receive is $6,833. For a child between the ages of 6 and 17, the maximum is $5,765 per child.
The CRA calculates the amount you will receive based on your “adjusted family net income.” This means that you add together the net income of you and your spouse. If you are single and are primarily responsible for your child, you put your own net income only.
The good news: There is no limit to the number of children you can claim, as long as they live with you and meet the age requirements. However, the benefit amount is reduced if you have more than one child.
The Canadian government provides a calculator that allows you to determine whether you are eligible and the approximate amount that you would receive.
The CRA cautions that the calculator provides only an estimate. After you apply, they will advise you of the exact amount you will get.
It’s definitely worthwhile to try the calculator and see if you are eligible for the child care benefit Canada. Even families with a net income of $200,000 may be eligible for a modest benefit, depending on the number of children in the household.
How to apply for the child tax benefit
You can register as soon as your child is born or starts to live with you. You can apply through your provincial birth registration or online via your Canada Revenue Agency account. You can even apply by mail.
More good news: Once you have applied, you will receive the benefit automatically every month as long as you stay below the maximum income and the child continues to live with you. You can collect until the child turns 18.
The amount you receive will be adjusted each year based on your income. For example, in July 2022 your benefit will be revised based on your family earnings during the 2021 calendar year. The benefit will be the same from July 2022 to July 2023.
Is the child tax credit a taxable benefit?
The good news just keeps coming! The child tax credit Canada is tax free. You don’t have to count it as income when you file your income tax return.
Canada Child Tax Benefit (CCTB) payment dates
This child benefit is paid every month. You can view the list of monthly CCTB payment dates on the CRA website here.
If your benefit is less than $240 per year, you will not receive a monthly payment. Instead, you get an annual payment in July.
Canada child benefit increase 2021
The government adjusts the Canada child benefit every July based on the rate of inflation. With both home prices and grocery bills soaring in recent months, this is good to hear. In January 2022, the rate of inflation hit 5.1 percent so there could be a significant increase in the benefit this July.
During the pandemic, the government raised the 2021 rate, providing families with up to $1,200 in additional funds for a child under 6.
Is there a child disability benefit?
If your child is disabled, there is an additional Child Disability Benefit of up to $2,915 per year. Your child must be eligible for both the Canada Child Benefit and the disability tax credit. Like the Canada Child Benefit, the disability benefit is reduced based on the adjusted net family income and marital status.
If you have more than one disabled child, you can claim the Child Disability Benefit for all of them. However, the amount may be reduced – similar to the Canada Child Benefit.
The disability tax credit is available to parents with a child under the age of 18 who have a severe and prolonged impairment in physical or mental functions. If the child’s status changes and they no longer qualify for the tax credit, they would also not be eligible for the Child Disability Benefit.
The Canada Child Benefit is a great program to help defray the costs of raising a child. Food, clothing and sports equipment all add up. If you have children under the age of 18, be sure to try the calculator to see if you are eligible. For a child under the age of 6, the maximum you can receive is $6,833 per year. Payments are adjusted based on your net family income. However, even families with substantial incomes can still receive a modest benefit.
