So what does it mean with the new guidelines for the Universal Child care benefit (UCCB)? Well it is a taxable benefit. It was introduced in 2006 originally to help families pay for daycare, but there were no rules as to what the money can be used for. As of this writing the changes that have been made to the UCCB are the following: For children under 6 it is now $160.00 a month. For children 6-17 it is reduced to $60.00 a month. To qualify the child must be living with you and you have custody. There are a few more rules which can be found at this link: http://www.cra-arc.gc.ca/uccb/ But generally pretty much everyone with a child under 18 qualifies.
So it’s taxable what should I do now? That all depends on your financial situation. There are many things you can do. However it all comes down to your financial situation. If you are in a low tax bracket you may not owe much on the benefit. Here is how to make the tax situation better should you be able to:
First of all very few jobs now days are obtainable with just a grade 12 education. Even if your child is not academic and college or university are not in the books for your child chances are high they will need a post secondary education. There are many trade schools teaching all the trades. From carpentry, plumbing, electrical, and welding just to name a few. Education is expensive and is just getting more expensive. So a good idea is to put the money into an RESP. Or Registered Education Savings Plan. But how can this benefit you. Simple the government will top it up by 20% per year with a $500.00 maximum per year. So if you put at least $2500.00 per year you will get the extra $500.00 per year. Which is more than the tax you would pay on the UCCB. Not to mention that it will be earning interest over the years. If you start an RESP for your child at birth, and for 17 years put at least $2500.00 into an RESP, the government will put in $8500.00 during that time. Pretty good huh? Your child (or you) will have to register for a SIN in order to qualify for this benefit. For more information go to the CRA site: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/resp-reee/menu-eng.html
If you happen to be lucky enough to be higher income you may want to donate to a registered charity. Make sure the charity is a registered Canadian charity before donating. Many people like to research the charities they donate to, as they like to see how much of their donation is actually being put to good use. Again the CRA has a website for this: http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html You can check out the charity, look at reports on their revenue and what it was used for. All charitable donations to a registered charity are tax deductible. So many people have causes they wish to support and charities are a good way to do that.