5 Deductions Your Children Get You on Your Taxes
By Tracy Cassels
April 13, 2015
Lifestyle
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It’s tax-time. Some of us have been on the ball and have actually filed our taxes already, but for many of us with kids, it’s one more thing we simply haven’t done yet. That’s okay. We have until the end of this month and hopefully this post will help you understand some of the ways your kids can help you save some money this year. I’m not including the money you can receive from the government year-round like the Universal Child Care Benefit and the Canada Child Tax Benefit, but rather the things you’ll keep your receipts for and claim on your taxes.
This is the standard claim so all you do is check a box on your taxes for this one. Either parent can claim this (although only one can) although now that family taxes are a little different in that we have income splitting allowed, it likely matters less who claims if you’re filing jointly.
This one has been around for a while yet I’m always surprised to hear people that have missed out on it or are unaware that they can write off their children’s sports and physical activities under this credit. Each child receives up to $500, but the catch is that the class has to be ongoing for eight weeks and occur weekly OR be a camp that runs five consecutive days (so those four-day camps from the long weekends technically don’t count). If your child has a disability, then the total you can claim doubles to $1000. A note to remember to keep your receipts for this as you may be asked to provide them.
Only around since 2012, the Child Arts Credit is the same as the Fitness Credit except for the arts. The amount - $500 – is the same and the caveats are the same as for the Fitness Credit. This means, the arts programs must also be a minimum of eight weeks (held weekly) or a five-day camp and the amount also doubles for those with children with disabilities. Notably, some parents may not be aware that this includes the usual stuff like dance and art and music as well as academic tutoring and community programs (e.g., Girl Scouts). According to the CRA,
“The program also has to meet at least one of the following criteria:
I think because most of our health care is covered provincially, many of us don’t think much about the few expenses we have in between, such as dental or prescriptions. However, these amounts are actually deductible for us and our children. Unfortunately if you haven’t kept your receipts, it becomes difficult as you would need to provide them, but if you start keeping track, it’s one more way to lower your taxes (or increase that refund). Of course this refers to any amount you paid after any reimbursement from insurance so make sure you keep those records as well.
Of note, if you are just realizing this for the first time and had some large expenses in 2013, you can actually have the year in which you use this go into 2013 so long as it remains a 12-month period that ends sometime in 2014. So, for example, if your child had dental surgery in September of 2013 and you didn’t claim it last year, you could count your medical expenses from September 2013-August 2014 for this year’s taxes. Then do the same period the next year or if you have no expenses in September or October from 2014, do your next year from November 2014-October 2015. Put simply, there’s no reason to eat these costs if you don’t have to.
Yes, everyone should know they can claim daycare, but did you know that you can claim any semi-regular care as well? Some people have a sitter once or twice a week and believe this cost isn’t tax deductible but it is. The problem is that you need to receive a receipt from your nanny/babysitter/caregiver with the full amount paid to them and their signature and information on it. In short, they have to claim the earnings. For occasional babysitting, it doesn’t make sense, but if you’re regularly employing someone, it may not be unreasonable to ask them for this, but this is a discussion you should have with your caregiver.
There you have it – five ways your kids can save you money come tax time. As always, keep your receipts (I find having a specific folder in my filing cabinet good or even a portable filing container for taxes to be ideal) as you may yourself needing them as the CRA will often ask for proof if you’re claiming a lot of deductions. (As someone who has had this happen several times, if you have the receipts, it’s a matter of copying them so you have your copies and then just getting them in to the CRA and the whole thing goes away.)
Check out Staple's Tax Centre for all the programs you'll need to help you file your taxes this year (and yes, they'll help you get all the aforementioned credits)!
- Child Tax Credit
This is the standard claim so all you do is check a box on your taxes for this one. Either parent can claim this (although only one can) although now that family taxes are a little different in that we have income splitting allowed, it likely matters less who claims if you’re filing jointly.
- Child Fitness Credit
This one has been around for a while yet I’m always surprised to hear people that have missed out on it or are unaware that they can write off their children’s sports and physical activities under this credit. Each child receives up to $500, but the catch is that the class has to be ongoing for eight weeks and occur weekly OR be a camp that runs five consecutive days (so those four-day camps from the long weekends technically don’t count). If your child has a disability, then the total you can claim doubles to $1000. A note to remember to keep your receipts for this as you may be asked to provide them.
- Child Arts Credit
Only around since 2012, the Child Arts Credit is the same as the Fitness Credit except for the arts. The amount - $500 – is the same and the caveats are the same as for the Fitness Credit. This means, the arts programs must also be a minimum of eight weeks (held weekly) or a five-day camp and the amount also doubles for those with children with disabilities. Notably, some parents may not be aware that this includes the usual stuff like dance and art and music as well as academic tutoring and community programs (e.g., Girl Scouts). According to the CRA,
“The program also has to meet at least one of the following criteria:
- it contributes to the development of creative skills or expertise in an artistic or cultural activity;
- it provides a substantial focus on wilderness and the natural environment;
- it helps children develop and use particular intellectual skills;
- it includes structured interaction between children where supervisors teach or help children develop interpersonal skills; or
- it provides enrichment or tutoring in academic subjects.”
- Medical Expenses
I think because most of our health care is covered provincially, many of us don’t think much about the few expenses we have in between, such as dental or prescriptions. However, these amounts are actually deductible for us and our children. Unfortunately if you haven’t kept your receipts, it becomes difficult as you would need to provide them, but if you start keeping track, it’s one more way to lower your taxes (or increase that refund). Of course this refers to any amount you paid after any reimbursement from insurance so make sure you keep those records as well.
Of note, if you are just realizing this for the first time and had some large expenses in 2013, you can actually have the year in which you use this go into 2013 so long as it remains a 12-month period that ends sometime in 2014. So, for example, if your child had dental surgery in September of 2013 and you didn’t claim it last year, you could count your medical expenses from September 2013-August 2014 for this year’s taxes. Then do the same period the next year or if you have no expenses in September or October from 2014, do your next year from November 2014-October 2015. Put simply, there’s no reason to eat these costs if you don’t have to.
- Child Care
Yes, everyone should know they can claim daycare, but did you know that you can claim any semi-regular care as well? Some people have a sitter once or twice a week and believe this cost isn’t tax deductible but it is. The problem is that you need to receive a receipt from your nanny/babysitter/caregiver with the full amount paid to them and their signature and information on it. In short, they have to claim the earnings. For occasional babysitting, it doesn’t make sense, but if you’re regularly employing someone, it may not be unreasonable to ask them for this, but this is a discussion you should have with your caregiver.
***
There you have it – five ways your kids can save you money come tax time. As always, keep your receipts (I find having a specific folder in my filing cabinet good or even a portable filing container for taxes to be ideal) as you may yourself needing them as the CRA will often ask for proof if you’re claiming a lot of deductions. (As someone who has had this happen several times, if you have the receipts, it’s a matter of copying them so you have your copies and then just getting them in to the CRA and the whole thing goes away.)
Check out Staple's Tax Centre for all the programs you'll need to help you file your taxes this year (and yes, they'll help you get all the aforementioned credits)!