The government recently announced new legislation that will expand income splitting to families with children.
Back in 2007, the government announced pension income splitting [1] that allowed those who have certain pension income to split up to half of the pension income with their spouse or common law partner.
On October 31, 2014, the government announced the new Family Tax Cut as well as other changes to reduce the tax burden of families with children.
Family Tax Cut – Income Splitting
The new Family Tax Cut permits limited amount of income splitting between spouses. Effective for the 2014 tax year, the rules allow the transfer of up to $50,000 of taxable income from one spouse to the other. The couple must have children under the age of 18 and the maximum tax relief is capped at $2,000.
Other Tax Benefits
Other benefits announced include:
- An increase in the Universal Child Care (UCCB) payments from $100 per month to $160,
- Expanding the UCCB program that is currently only available when children are aged 6 or under to provide a benefit of $60 per child aged 6 to $17, and
- Increasing the child care deduction by $1,000 to $8,000 (long overdue in my opinion!).
During tax filing, we will help you minimize your tax by taking full advantage of the various programs available.
If you would like to take advantage of our tax and financial planning services [2] before or after tax filing season, give us a call at 289-288-1206 to arrange an appointment.