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Significant changes to Canada's Universal Child Care Benefit (UCCB) and related income tax measures were announced on October 30, 2014 by the Prime Minister.

What exactly is changing w.r.t. UCCB and income tax filing for Canadian families?

Where can definitive details be found?

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Changes to UCCB benefits starting in 2015:

  • The Universal Child Care Benefit (UCCB) that parents of children under 6 can receive will increase from the current amount of $100/month per child under 6 to a new amount of $160/month per child under 6.
  • Parents of children age 6–17 can receive a new UCCB benefit of $60/month. Previously, UCCB benefits ended once a child turned six. While this benefit is to take effect in January 2015, I've seen one media report that the first payment will occur in July 2015 but will include the amounts for January–June 2015.

Related changes to income tax filing effective in 2015:

  • The Child Care Expense Deduction (line 214) dollar limits will each increase by $1000, to new amounts of $8000 for children under 7 and $5000 for children age 7–16. Notes: As a tax deduction, your tax liability gets reduced at your marginal income tax rate, not the lowest tax rate (as would be the case for a tax credit). Yes, you still need receipts from your child care provider to support any claim.

  • The non-refundable child tax credit a.k.a. amount for children under age 18 (line 367) introduced in 2007 is being eliminated starting in tax year 2015 coincident with the UCCB enhancement above. The credit could previously reduce tax liability by ~$340.

Brand new: Family Tax Cut (aka "income splitting") for tax year 2014

  • The Family Tax Cut is being introduced and will be effective for tax year 2014. That is, when you file your 2014 income tax return in early 2015, you may be able to take advantage of this measure for income already earned in 2014.

  • Provided a couple has at least one child under the age of 18, the Family Tax Cut will permit the transfer of up to $50,000 of taxable income from the higher income spouse's income tax return to the lower income spouse's return. While the potential transfer of $50,000 of taxable income to lower tax brackets sounds like a really big deal, the maximum tax relief is capped at $2000.

References

  • p.s. If I left anything out, feel free to edit and/or comment. Thanks. – Chris W. Rea Oct 30 '14 at 23:05

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