Tax Credits You May Be Eligible To Claim When You Have A New Baby

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Having a baby is one of the most exciting, and possibly one of the most stressful times in your life! Taxes are probably the last thing on your mind. So we’ve gathered some info on tax credits and tax deductions that may help out your new family.

Medical Expenses

If you incurred any expenses, such as the cost of a hospital stay, pre-natal care with a nurse, or the cost of fertility treatments, you may be able claim those expenses as medical expenses on your personal (T1) income tax return.  Medical expenses are one of the most overlooked ways of saving at tax time.

The Canada Child Benefit (CCB)

This tax-free monthly payment is an income-based benefit to help families with the cost of raising children under 18 years of age. In order to qualify, you and your spouse / partner must file your taxes every year, as the Canada Revenue Agency (CRA) uses information from your return to calculate how much you qualify for. The benefits are paid over a 12-month period, starting in July, and based on your income tax return of the previous year.

Child Care Expenses

If you and your spouse were required to pay for child care so that you could either go back to work, run a business, go to school or conduct research for which a grant was provided, make sure you get a receipt as child care expenses such as babysitters, nursery school or daycare, are an eligible income tax deduction. The CRA has more information here.

Child Disability Credit & Disability Amount

If your child is born with, or has a disability, you may be eligible for an additional credit on your tax return as well as an extra benefit added to your Canada Child Benefit. If your child is eligible, you and your child’s doctor or nurse practitioner should complete/sign a form T2201 and send a copy to the CRA. If approved, you’ll be eligible to claim the disability amount for your child at tax time. If you already receive CCB payments, an extra amount will be added once your T2201 is approved.

Adoption expenses

If you grew your family through adopting a child under 18, you can claim eligible expenses paid for that adoption to a maximum of $15,905 per child. These expenses must have been incurred during the tax year in which the adoption process was completed.

Here’s a list of eligible adoption expenses:

  • Fees paid to an adoption agency licensed by a provincial or territorial government

  • Court costs and legal and administrative expenses related to an adoption order for the child

  • Reasonable and necessary travel and living expenses of the child and the adoptive parents

  • Document translation fees

  • Mandatory fees paid to a foreign institution

  • Mandatory expenses paid for the child’s immigration

  • Other reasonable expenses related to the adoption required by a provincial or territorial government

  • Other reasonable expenses related to the adoption required by an adoption agency licensed by a provincial or territorial government

Eligible Dependent

You may be able to claim this amount for one other person if at any time in the year you met all of the following conditions at once:

  • You did not have a spouse or common-law partner or, if you did, you were not living with, supporting, or being supported by them.

  • You supported a dependant in 2019.

  • You lived with the dependant (in most cases in Canada) in a home you maintained.

(You cannot claim this amount for a person who was only visiting you).

In addition, at the time you met the above conditions, the dependant must also have been either:

  • Your parent or grandparent by blood, marriage, common-law partnership, or adoption; or

  • Your child, grandchild, brother, or sister, by blood, marriage, common-law partnership, or adoption and under 18 years of age or had an impairment in physical or mental functions.

Canada Caregiver Credit

The Canada Caregiver Credit combines three discontinued credits into one. This non-refundable tax credit may be available to Canadians who support a spouse or common-law partner, or a dependant with a physical or mental impairment.

Even as a sleep-deprived new parent, you must still file your Canadian tax returns, and do them on time. Concept Professional Group is happy to help you to complete your tax return, or answer any questions you have.