Tax Planning for Families: Credits and Deductions in 2024

As a family, you have access to several valuable tax credits and deductions designed to ease financial pressures and help you save on taxes. From childcare expenses to credits for dependents, this guide covers essential tax benefits for families in 2024.

1. Child Care Expense Deduction

If you’re paying for childcare to enable you to work, study, or train, you may be eligible to deduct these expenses from your income:

• Eligible Expenses: Childcare costs include daycare fees, babysitting (from an arm’s length provider), and overnight camps.

• Deduction Limits: You can claim up to $8,000 for each child under seven, $5,000 for each child aged 7 to 16, and $11,000 for children with disabilities.

Keeping receipts and records of childcare costs throughout the year will ensure you maximize this deduction.

2. Canada Child Benefit (CCB)

The Canada Child Benefit (CCB) is a tax-free monthly payment made to eligible families to help with the cost of raising children:

• Eligibility and Payment: The CCB is based on your adjusted family net income and the number of children. Payments increase if your family’s income falls within a certain threshold.

• Application Process: Apply through the CRA, or automatically receive it by filing your tax return if you’ve already registered your children.

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The CCB provides crucial support to families, helping offset daily costs and childcare expenses.

3. Family Caregiver Credit (FCC)

If you’re caring for a spouse, child, or other dependent with a physical or mental impairment, you may qualify for the Family Caregiver Credit:

• Amount and Eligibility: The FCC allows up to $2,350 as an additional amount on the eligible dependent, spouse, or common-law partner credits.

• Documentation Requirements: You’ll need a medical certificate from a doctor stating that the dependent has a qualifying impairment.

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This credit can provide relief for families who take on caregiving responsibilities.

4. Child Disability Benefit (CDB)

Families with children who qualify for the Disability Tax Credit (DTC) may also be eligible for the Child Disability Benefit, a monthly benefit:

• Benefit Amount: The CDB can provide up to $2,985 annually per eligible child.

• DTC Qualification: Your child must be eligible for the DTC, which requires a medical practitioner to certify that your child has a prolonged impairment.

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The CDB offers essential support for families with children who need extra care.

5. Eligible Dependent Credit

If you’re a single parent, you may claim the Eligible Dependent Credit for one child, which is equivalent to the spouse or common-law partner amount:

• Eligibility: This credit is available if you support a dependent child and live without a spouse or common-law partner.

• Benefit Amount: The credit allows you to claim an amount similar to what is allowed for a spouse, helping offset the costs of raising a child as a single parent.

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This credit provides valuable relief to single-parent families.

6. Canada Education Savings Grant (CESG)

While not a tax credit, the Canada Education Savings Grant (CESG) provides an extra incentive to save for your child’s education. When you contribute to a Registered Education Savings Plan (RESP):

• CESG Matching: The government matches 20% of RESP contributions up to $500 per year, with a lifetime maximum of $7,200 per child.

• Additional Grants for Low-Income Families: Families with lower income may qualify for additional CESG grants and the Canada Learning Bond.

  
  

This grant can significantly boost your education savings, making post-secondary education more accessible for your children.

7. Tuition, Education, and Textbook Amounts Transfer

If your child is a post-secondary student and doesn’t need all their tuition credits to offset their taxes, they can transfer up to $5,000 in unused credits to a parent or grandparent:

• Eligible Credits: This includes tuition fees and the education and textbook amounts if applicable.

• Transfer Process: Your child must complete the necessary forms to transfer these credits to a parent or grandparent.

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This transfer allows parents to benefit from their children’s unused credits, reducing the family’s overall tax burden.

8. Adoption Expense Credit

If you have adopted a child, you may claim eligible adoption expenses up to a maximum amount:

• Maximum Claim Amount: For 2024, you can claim up to $17,131 in eligible expenses per adopted child under the Adoption Expense Credit.

• Eligible Expenses: Include agency fees, legal fees, and travel expenses related to the adoption.

  
  

This credit provides financial support for families navigating the adoption process.

9. Climate Action Incentive (CAI)

Families residing in provinces with carbon pricing may qualify for the Climate Action Incentive (CAI) payment. This tax-free rebate offsets higher household costs due to carbon pricing:

• Eligible Provinces: Alberta, Saskatchewan, Manitoba, and Ontario residents are eligible for CAI payments.

• Family Size Adjustments: The amount received increases based on the number of family members, with higher payments for larger families.

  
  

The CAI rebate provides relief from carbon pricing costs, making it easier for families to manage household expenses.

How CPCATS Can Help You Claim Family Tax Benefits

Navigating family-related tax credits and deductions can be complex, but maximizing them can significantly reduce your tax burden. Clear Path Consulting and Tax Services (CPCATS) is here to help your family make the most of available tax breaks.

Reach out to CPCATS today for personalized advice on family tax planning and maximize your savings for the 2024 tax season.