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Eligibility For The Canadian Child Benefit

Recently, sleepless nights, diapers and miniature became part of your life. Or, maybe you are expecting an addition to the family. Either way, you’re probably wondering if you qualify for the Canadian Child Benefit (CCB). This benefit is new and was created in 2016, and it’s a non-taxable monthly payment from the federal government. This is the Canada Revenue Agency’s (CRA) way of recognizing that raising kids is not easy and needs a few more expenses, and it’s paid to eligible families to assist with the cost of raising children, depending on your household income.

Will I receive CCB payments?

In order to be qualified to receive the CCB, parents must meet the following conditions:

  • The child must be living with you, and the child must be under the age of 18
  • The child’s care and upbringing must be your primary responsibility
  • You must a resident of Canada
  • At least one parent/spouse/common-law partner must be a National of Canada, permanent resident, protected person, or temporary resident who has lived in Canada for the previous 18 months.

What to do to receive CCB payments if you had a baby but didn’t file your return this year. 

The Canadian Revenue Agency calculates eligibility in July which is based on the adjusted family net income for the previous year. So, in order to be eligible for Child Care Benefit payments, parents must ensure they file their income tax returns annually to start or continue receiving benefits. If a qualified parent fails to file a return, even if they have no income to report, the CRA can’t calculate the correct CCB amount so payments will stop coming in August.

I filed my return late in the year. Will I still receive payments?

Once both parents file a return, CCB payments will not only start again, but they’ll be retroactive, so you should receive any amounts for months that were missed. If you start or end sharing custody of your child with their other parent, be sure to inform the CRA as soon as possible as it will affect your payments.

What can I use CCB payments for?

The CCB is meant for your child, but since they are minors, the CRA is trusting you as their parent to use it for the upkeep of the child. Some families use their payments as part of their budget for things like school supplies, food and clothing.

Can I save CCB payments for my child? Will they pay taxes on it?

If CCB payment was paid to you by direct deposit, you can then transfer it to an account in your child’s name, and when they are old enough to start filing tax return, any interest or dividends earned would be reported by them. Most times, the money earned by the CCB payments will be less than the basic personal amount and will be tax-free (unless your child is employed).

If you receive CCB payments in your account first and then direct it to your child’s account,  it would still be considered your income and your child won’t be taxed on it.

I have an outstanding tax bill. Will my CCB payments be automatically deducted?

If you happen to owe the CRA some money, your CCB payments won’t be deducted or used to offset your bill. This payment is in place for the purpose of assisting you with the immediate costs of raising your child, and won’t automatically be used to pay down your debt. You’ll continue to receive payments as long as you meet the deadline to file your return, even if you have an outstanding tax bill.

Having kids means expecting the unexpected, but making sure your paperwork is up-to-date with CRA will help make sure you’re getting the tax credits and deductions you’re eligible for.

See here to know more about the Canadian tax return.