After July 20, check mail if your child is over six
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Q: I am a union painter and the sole provider in my family. My wife and I have three children — three, nine and 11 years old. Do I qualify for the child care benefit? What must I do to receive the benefit?
Q: I am a single mother with a four year old. How can I receive the new child care Benefit? Does this affect my GST credit?
A: Mr. Harper’s recent budget has given many Canadians food for thought. The new Universal Child Care Benefit (UCCB) is an initiative by the federal government that allows the parents to choose where and how they wish to pay for child care by giving eligible children under six years old $100 per month, starting July 2006. According to the Canada Revenue Agency, first cheques will be mailed on or about July 20, 2006. Check your mailbox.
In order to qualify, the child must be under six years old and the parent has the primary responsibility for the child’s care. Parents that currently receive the Canada Child Tax Benefit (CCTB) will automatically be sent the $100. Parents that do not receive the CCTB must obtain and complete the Canada Child Tax Benefit Application form. Forms can be downloaded by visiting CRA website at www.cra.gc.ca/benefitsor call 1-800-387-1193.
The $1,200 UCCB/year per eligible child are taxable and must be reported by the lower income spouse. Form RC62, will be sent to you for tax filing before Feb. 28, 2007. Unfortunately, a single lower-income parent will not keep the same after tax amount as a two-parent home that has a stay at home parent. On the positive side, UCCBs are not included for calculating GST and CCTBs. Therefore, modest income taxpayers will not lose the other benefits because of UCCBs.
Ms. Lysack, executive director of the Child Care Advocacy Association of Canada (CCAAC) believes “the federal government must have a more comprehensive approach to child care and education in Canada.”
Ms. Lysack argues that the $100 is inequitable and assistance should be allocated on a “greatest needs, greatest benefit” basis. Maybe we should all take a closer look at the bone Mr. Harper gave to Canadians and ask “Where’s the beef?”
The following summarizes the new Universal Child Care Benefit (UCCB):
- Child/children must be under six years of age.
- Existing CCTB recipients do not have to apply to receive UCCB.
- Non-recipients of CCTB must apply to CRA for benefits.
- UCCB is taxable to lower income spouse.
- Child does not have to register in daycare to be eligible for UCCB.
- GST or CCTB are not affected by UCCBs.
- Monthly UCCB payments are mailed out starting July 20, 2006.
- UCCB payments are not reduced if a taxpayer owes CRA.
- Up to 11 months to apply and receive retroactive benefits.
- Contact CRA if you have not received payment on or about July 20.
The following is to assist individual’s with the application form.
No! You do not need a lawyer or accountant to complete this. Just time and patience:
- You must complete form RC66 E, Canada Child Tax Benefit Application.
- You may obtain the form at CRA’s website or call 1-800-387-1193.
- The application has four pages.
- Page 1: Complete name, address and marital status.
- Page 2: Complete spousal information and child/children particulars.
- Page 3: Complete, if more than one child, and must be signed by you and your spouse.
- Page 4: Complete, if you wish to have direct deposit in your bank.
- Mail to CRA with self-addressed envelope.
- Wait for cheque or deposit in your bank account.
Henry Choo Chong, CGA provides accounting and tax services to individuals and businesses in the GTA. He can be reached at 416-590-1728, ext. 304. E-mail questions to Money Matters at email@example.com.