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What Is Child Tax Credit
What is a Child Tax Credit?
Child Tax Credit is a type of tax benefit plan for families depending on the number of dependent children in the family. Like USA and UK, Canada too has a very clearly laid out Child Tax Credit plan known as Canada Child Tax Benefit plan or CCTB. Canada is quite unique in its approach when it comes to tax benefit plans. In the case of child tax credit plans, the government does not reduce the taxes to be paid by the families at the end of each financial year.
Instead, the government makes a monthly payment to the families that qualify under the Canada Child Tax Benefit Plan. The unique aspect of the child tax credit plan of Canada is that it ensures that the money is channeled in the right direction instead of providing tax exemption facilities to their citizens.
The eligibility criterion for this plan is quite simple. Any family with a lower income taking care of one or more dependent children will qualify for the plan. The child can be theirs or adopted. However, the benefit under this plan will only be provided to the family member who is providing the majority of care to the child.
Thus, in a family with a child and its mother, the benefit will directly be given to the mother rather than any other member of the family in the same household. Financial support is not the only factor considered under the plan. Another condition which goes without saying is that the child in question should be a citizen of Canada and under the age of 18.
The plan also spells out a special condition for children with any kind of disability and for those requiring certain special needs. Families of these children will be provided with an additional amount under the Canada Child Tax Benefit plan. This benefit is called Canada Disability Benefit or CDB. Besides the above two benefits, the Child Tax Credit in Canada also mentions a provision for families who are employed and caring for children with disabilities.
These families, in spite of being employed, have a low income, which qualifies them for the plan. An additional benefit is given to such families under the National Child Benefit. This is mainly to promote such families to take up employment and to avoid relying solely on the government to support them.
It is advisable to file for tax benefits under the Canada Child Tax Benefit plan or Canada Disability Benefit or National Child Benefit plan, soon after the birth of the child. The qualification of a family member to receive any of the above mentioned plans is evaluated every year based on the tax returns filed by the person every year.
When the income of the person crosses the point beyond which the benefit does not apply, the monthly payments will be immediately stopped. In order to obtain the benefits of the plan it becomes essential for the family member to file for returns each year even if there is no income to be reported. What is Child Tax Credit
Child Tax Credit is a type of tax benefit plan for families depending on the number of dependent children in the family. Like USA and UK, Canada too has a very clearly laid out Child Tax Credit plan known as Canada Child Tax Benefit plan or CCTB. Canada is quite unique in its approach when it comes to tax benefit plans. In the case of child tax credit plans, the government does not reduce the taxes to be paid by the families at the end of each financial year.
Instead, the government makes a monthly payment to the families that qualify under the Canada Child Tax Benefit Plan. The unique aspect of the child tax credit plan of Canada is that it ensures that the money is channeled in the right direction instead of providing tax exemption facilities to their citizens.
The eligibility criterion for this plan is quite simple. Any family with a lower income taking care of one or more dependent children will qualify for the plan. The child can be theirs or adopted. However, the benefit under this plan will only be provided to the family member who is providing the majority of care to the child.
Thus, in a family with a child and its mother, the benefit will directly be given to the mother rather than any other member of the family in the same household. Financial support is not the only factor considered under the plan. Another condition which goes without saying is that the child in question should be a citizen of Canada and under the age of 18.
The plan also spells out a special condition for children with any kind of disability and for those requiring certain special needs. Families of these children will be provided with an additional amount under the Canada Child Tax Benefit plan. This benefit is called Canada Disability Benefit or CDB. Besides the above two benefits, the Child Tax Credit in Canada also mentions a provision for families who are employed and caring for children with disabilities.
These families, in spite of being employed, have a low income, which qualifies them for the plan. An additional benefit is given to such families under the National Child Benefit. This is mainly to promote such families to take up employment and to avoid relying solely on the government to support them.
It is advisable to file for tax benefits under the Canada Child Tax Benefit plan or Canada Disability Benefit or National Child Benefit plan, soon after the birth of the child. The qualification of a family member to receive any of the above mentioned plans is evaluated every year based on the tax returns filed by the person every year.
When the income of the person crosses the point beyond which the benefit does not apply, the monthly payments will be immediately stopped. In order to obtain the benefits of the plan it becomes essential for the family member to file for returns each year even if there is no income to be reported. What is Child Tax Credit
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