Federal Gov’t Removed Four Child Tax Credits starting January 01, 2017

Starting January 01, 2017, the federal government removed the four child tax credits: arts, fitness, education and textbooks.

Children’s Fitness and Arts Tax Credit

The Liberal Government Budget 2016  phase out the children’s fitness and arts tax credit:

For 2016, the maximum eligible fees in the year will be reduced to $500, but the additional amount of $500 for children eligible for the disability tax credit will not change. Therefore the maximum credit is reduced to $75 ($150 for a child eligible for the disability tax credit).

Starting January 01, 2017, the children’s fitness tax credit and the additional amount for children eligible for the disability tax credit is removed. So if you have any renewable fitness or art program membership for your kids this year, it can no longer be claimed as a tax credit.

The Liberals’ budget also canceled income splitting for families, a tax measure that allowed someone to transfer up to $50,000 of income to a spouse with lower income if they had a child under 18 years of age. The tax credit for income splitting was capped at $2,000.

For more details check here: Fitness and Arts Tax Credit

Education and Textbook Tax Credit

The education tax credit and the textbook tax credit are non-refundable tax credits that generally allow a student to claim an amount for each month in the year that they are enrolled in a qualifying educational program at a designated educational institution and certain criteria are met.

Unused credits can be transferred to the student’s spouse or common-law partner, or to their or their spouses’ or common-law partner’s parent or grandparent for the year, or carried forward to the first future year that the student would otherwise have to pay tax.

Effective January 01, 2017, the Liberal Government eliminated the federal education and textbook tax credits.  but there’s no need to rush out and buy your textbooks before 2017 – unused tax credits from 2016 can be used in future returns. (Under the credit, full-time students can claim $400 per month of enrollment and $65 a month for textbooks.)

For more details check here: Education and Textbook Tax Credits

“High-income earners in most provinces will pay more but for the majority of Canadians, these two changes will mean more money in their pockets,”

-Canadian Taxpayers Federation Federal Director Aaron Wudrick

Image from Google