Becoming a parent is one of the most significant life events anyone can experience. With a new addition to the family comes a lot of responsibility, including financial obligations. As a new parent in Toronto, you may have several tax-related questions. This tax guide will provide you with pro tips and everything you should know to navigate the tax system as a new parent.

Claiming The Canada Child Benefit (CCB)

The Canada Child Benefit (CCB) is a tax-free payment that eligible families with children under the age of 18 can receive. The amount you receive depends on several factors, including the number of children you have and your household income. As a new parent, you must apply for the CCB, which you can do through the Canada Revenue Agency (CRA) website or by filling out a paper application.

Pro Tip: Make sure you apply for the CCB as soon as possible, as the benefit is retroactive to the month your child was born.

Childcare Expenses

Childcare expenses can be a significant cost for new parents in Toronto. However, you can claim these expenses on your tax return, which can help reduce your tax liability. To claim childcare expenses, you must have receipts from a licensed childcare provider.

Pro Tip: Keep all your receipts and records of childcare expenses throughout the year to ensure you can claim the maximum amount possible on your tax return.

Maternity And Parental Leave

As a new parent in Toronto, you may be eligible for maternity and parental leave benefits. These benefits are available to eligible employees who take time off work to care for a newborn or adopted child. The benefits are provided through Employment Insurance (EI) and are taxable income.

Pro Tip: If you received EI benefits during the tax year, make sure you include them on your tax return as income.

Registered Education Savings Plan (RESP)

A Registered Education Savings Plan (RESP) is a tax-advantaged account that allows parents to save for their children’s post-secondary education. Contributions to an RESP are not tax-deductible, but the investment income earned on the contributions is tax-free until the money is withdrawn.

Pro Tip: Consider opening an RESP for your child as early as possible to maximize the investment income earned on the contributions.

Child Disability Benefit (CDB)

If you have a child with a disability, you may be eligible for the Child Disability Benefit (CDB). The CDB is a tax-free payment that provides additional financial assistance to families with children who have a severe and prolonged impairment in physical or mental functions.

Pro Tip: Make sure you apply for the CDB if you have a child with a disability to receive the financial assistance you are entitled to.

In conclusion, as a new parent in Toronto, understanding the tax system can be overwhelming. However, by following these pro tips and knowing everything you should know about the tax-related benefits and obligations of parenthood, you can navigate the system with confidence. Don’t forget to consult a professional accountant or tax specialist for personalized advice.