On November 2014, the Government of Canada announced new tax cuts for Canadian families with children under the age of 17. Under the proposed changes, the family tax cut will eliminate or reduce the difference in the federal tax payable by a one-earner couple relative to a two-earner couple with a similar salary.
How does it work?
Families in which one parent works full-time and the second parent either stays at home with the children or works part time and earns less, the second parent generally is taxed at a lower rate than the higher income earner. The federal tax credit will allow the higher earning spouse to, in effect, transfer up to $50,000 of taxable income to a spouse in a lower tax bracket. The credit will provide federal tax relief, capped at $2,000, for couples with children under the age of 18, effective for the 2014 taxation year.
Canadian families with children under the age of 18 will benefit from the federal tax relief measures that are designed to make life more affordable for the average Canadian family. These measures will help them offset child care costs and provide additional financial relief from other expenses.
Families will be able to file for the family tax cut in the Spring of 2015 when they file their 2014 tax returns. If you have any further questions about the new federal tax cuts or if you are not sure that you qualify for these cuts, please call us or visit our website for more information. 403-250-5111.