If your New Year’s resolution was to get your finances organized, you should make sure efiling your tax return by the deadline is on your to-do list.

Your tax return is an important financial document and tax planning should really happen year round. The good news for your 2014 tax return is there are some new tax credits available that could help reduce your tax bill.

Caroline Battista from H&R Block Canada highlights some of the new credits for 2015:

  • Increases to Universal Child Care Benefit: Do you have children under the age of 18? If so, you will benefit from changes to the Universal Child Care Benefit. The government is increasing the amount to $160 monthly (from $100) for each child under the age of six. New this year, is a monthly $60 benefit for children aged six through 17. The increase for January to June will be paid in a lump sum in July 2015 and will then be paid monthly after that. Remember, this money is taxable in the hands of the lower income spouse.
  • New Family Tax Cut: Designed as a limited form of income splitting, the Family Tax Cut allows families with children under 18 to save when one spouse earns considerably more than the other. Put simply, this credit allows a higher earning spouse to assign up to $50,000 from his or her tax return to the lower-income spouse’s return and claim up to $2,000 in tax savings. Here is an example:
  • Spouse 1: Earns $50,000 per year – portion of income in excess of $43,593 taxed at 22 per cent
  • Spouse 2: Earns $30,000 per year – entire income taxed at 15 per cent

By splitting the higher income with the second spouse, the entire income of $80,000 ($40,000 each) would be taxed at a rate of 15 per cent. This would result in tax savings of $423. One of them can therefore claim the family tax cut for this amount.

  • Doubled Children’s Fitness Tax Credit: The amount you can claim for the Children’s Fitness Tax Credit has doubled from $500 to $1,000 and is retroactive for 2014. Parents should claim the receipts for eligible activities such as swimming lessons or hockey in the year they paid – not the year the activity takes place.
  • New Search and Rescue Credit: Search and rescue volunteers who put in 200 hours or more of work can now claim a personal amount of $3,000, which means $450 tax savings. This was created to complement the volunteer firefighters credit.

HRB-Infographic-FamilyTax2-FBOOK

Keep in mind that there are many other credits already in place that could help you increase your tax refund or reduce the amount of tax you owe. For example, the First-Time Donor Super Credit provides extra credit for first-time donations. For first time cash donations made after March 20, 2013, you can claim 40 percent on the first $200 of donations and 54 per cent for donations between $200 and $1,000.

Related25 tips for filing your own tax return

If you have misplaced receipts, take the time to track them down. No one wants to pay more tax than they need to so make sure you don’t miss a thing.

If you’re unsure of what you can claim, an H&R Block Canada tax professional can walk you through what’s new for your tax return this year. For more information please visit www.hrblock.ca.

H&R Block is pleased to offer ONE gift certificate to give away to a lucky Boomer & Echo reader. The gift certificate is good for one regular return (T4) that can be used at a retail H&R Block location. Value: approx. $100. To enter, simply leave a comment below before Friday February 13th at 5:00pm EST.

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31 Comments

  1. Dan @ Our Big Fat Wallet on February 8, 2015 at 5:27 pm

    The new income splitting measures help but most aren’t affected by it and a couple would need an income of about $60-$70k with a large disparity between the two incomes in order to fully optimize the benefits. It’s capped at $2k which means any higher and the benefits aren’t as good

    • Alan W. (BCM) on February 9, 2015 at 5:41 am

      @Dan, yes I don’t understand the whole $2K cap given so few can take advantage of it, but in my case I can take advantage of it, so $2K back in my pocket will be nice

  2. Steve on February 8, 2015 at 5:43 pm

    Thanks for the tips! Hoping I can make the best out of this year’s return. Would love to seek some assistance from an H&R Block rep, as I’m still fairly new at learning all the various tax credits.

  3. Jill on February 9, 2015 at 5:42 am

    Ah yes, tax time. Thanks for the reminder. It’s time to pull that file and organize the paper and slips that I have been diligently stuffing in this past year.

  4. Verna on February 9, 2015 at 6:59 am

    Hi Robb,
    I believe there is a typo in the infographic you’ve displayed – #3 should be 7. Ah, tax time…

    • Echo on February 9, 2015 at 7:38 am

      Looking into getting this fixed – thanks!

  5. Ron Suter on February 9, 2015 at 7:12 am

    I used a new free online tax filing service last year called Simpletax and it certainly lived up to its name.
    It was east to use and filled with relevant features.

  6. AY on February 9, 2015 at 7:36 am

    Thanks for those tips – looking fwd to seeing what new credits I can claim this year!

  7. Tarilyn on February 9, 2015 at 8:00 am

    Thanks for the tips!

  8. Luis on February 9, 2015 at 8:52 am

    Thanks for highlight how to the New Family Tax Cut works !

  9. Barry @ Moneywehave on February 9, 2015 at 9:52 am

    Election year tax credits. I’m sure they’ll announce more stuff before we’re in full election mode.

  10. DivGuy on February 9, 2015 at 11:54 am

    I will use the income splitting credit for sure! I have an accountant that takes care of it all, but thank’s for the info! I’ll spread the word!

  11. aB on February 9, 2015 at 12:23 pm

    I haven’t attempted my taxes this year, so questions can be taken with a grain of salt.

    “UCCB taxable in hands of lower spouse”, after the ‘income split’ we should make the same amount (family income < 100k). With credits and other deductions (ie/ charity donations, medical get combined), would that ever flip around to the other spouse?

    In your example, "This would result in tax savings of $423. One of them can therefore claim the family tax cut for this amount."
    Does this mean, I have to do taxes twice? Once, without splitting, once with to find the amount to claim?

    • Caroline Battista on February 9, 2015 at 3:51 pm

      To answer the first question – UCCB is always claimed by the lower income spouse. Because the income is not actually being transferred in the Family Tax Cut calculation, it does not affect the income level of the other spouse.

      Second Question – The Family Tax Cut credit is calculated on a separate schedule within your tax return. You do not need to do your taxes twice. You will calculate the credit amount on form S1-A and then transfer the credit amount to your Schedule 1.

      I hope this helps.

      • aB on February 9, 2015 at 11:27 pm

        Thanks so much.

  12. Tawcan on February 9, 2015 at 1:01 pm

    I guess we’ll see the benefit of the new UCCB come in July. That extra money will go into Baby T’s RESP and we’ll get extra 20% return. I like that. 🙂

    I have been using Simpletax for tax filing and absolutely love the simplicity of the program.

  13. Jess on February 9, 2015 at 8:25 pm

    Thanks for posting the info on the child related benefits. My husband and I are new parents so this was really helpful to see in one place. Do you know whether the Children’s Fitness Tax credits runs like the RSP year (claim things up to March 2 for 2014)or is it just activities paid for in 2014?

    • Caroline Battista on February 18, 2015 at 4:06 pm

      Jess – the Children’s Fitness Credit is claimed in the calendar year you paid the fees. So if your child started hockey in January 2015 but you paid the fees for the program in December 2014, you can claim the receipt on your 2014 tax return.

  14. Kurt on February 10, 2015 at 9:42 am

    So, if I transfer $50k to my wife (she has no income) and she has $20k in leftover tuition credits, how does that all shake out with the “up to $2000 credit” thing?

    • Caroline Battista on February 20, 2015 at 2:49 pm

      Kurt – the Family Tax Cut is not an actual transfer of taxable income between spouses so it does not affect your wife’s return. Since your wife has no taxable income of her own, she will not be able to claim the tuition credits this year but can continue to carry them forward.

  15. Sarah Pearson on February 11, 2015 at 6:29 am

    Thanks for the tips!

  16. Helen Hercun on February 11, 2015 at 7:23 am

    Great article. Its a shame though that the government ignores a large part of the population- the DINKS ( double income no kids)

  17. Jessica on February 12, 2015 at 8:25 am

    H&R is my go to every year very helpful and do a great job!! How does this work/affect single parent’s of two children?

    • Caroline Battista on February 18, 2015 at 4:10 pm

      Jessica – thank you for trusting H&R Block with your tax return – we appreciate it. Single parents will benefit from the enhanced Universal Child Care Benefit and the increased Children’s Fitness Credit.

  18. Sustainable Personal Finance on February 12, 2015 at 10:02 am

    Great summary of new credits. Definitely an election year!

  19. kevin brandics on February 12, 2015 at 11:10 pm

    Good too see tax breaks increased

  20. Victoria on February 18, 2015 at 10:39 am

    Say a person earns $ 30,000 and the spouse earns $0 when filing would they be able to income split and would they recieve separate refunds? Would this essentially put them each into the lowest tax bracket and thus qualify them for maximum child and family tax credits?

    • Caroline Battista on February 18, 2015 at 4:13 pm

      Victoria – since you are already in the lowest tax bracket, the Family Tax Cut will not bring you any additional tax savings.

  21. Jose on February 28, 2015 at 12:49 pm

    Hi I make $130K and my wife does not work, we fulfill all the requirements listed in the CRA site for the family cut,
    Questions:

    1) still work for me?, The site does not mention if she does not have income
    2) Do I have to transfer $50,000 to her or the software’s will do it automatically
    3) Will I get $2K in my case?

    The answer will be really appreciated as H&R customer

    Thanks Jose

    • Caroline Battista on March 1, 2015 at 9:02 pm

      Jose – Based on the information you provided, you should qualify for the maximum Family Tax Cut amount of $2,000. If you provide the software program with all the information for both you and your wife, it should calculate the Family Tax Cut amount automatically. Thanks for trusting us with your tax preparation – we appreciate it.

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