The federal government has announced new changes to Child Tax Credits on the TD1 Form. Effective January 1st 2015, employees will no longer be able to claim the Child Tax Credit on Line 2 of the TD1 form.
An enhanced Universal Child Care benefit has replaced the Child Tax Credit and will now be processed through personal income tax filling rather than through payroll. Current Child Tax Credit claimants should have the Child Tax Credit removed unless they are claiming Line 2, Caregiver amount for children under age 18, at the end of the year. The Caregiver Amount should only be used in the case where a child is considered to be infirm.
The previous TD1 form (prior to 2015) details the following on Line 2:
Child amount – Either parent (but not both), may claim $2,255 for each child born in 1997 or later, that resides with both parents throughout the year. If the child is infirm, add $2,058 to the claim for that child. Any unused portion can be transferred to that parent’s spouse or common-law partner. If the child does not reside with both parents throughout the year, the parent who is entitled to claim the “Amount for an eligible dependent” on line 8 may also claim the child amount for that same child.
The new TD1 form’s Line 2 states the following:
Caregiver amount for children under age 18 – Either parent (but not both), may claim $2,093 for each infirm child born in 1998 or later, that resides with both parents throughout the year. If the child does not reside with both parents throughout the year, the parent who is entitled to claim the “Amount for an eligible dependent” on line 8 may also claim the family caregiver amount for that same child who is under age 18.
In light of this change; employers must ensure that employees, who are currently claiming the Child Tax Credit through payroll, complete a new TD1 form.
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Ashley Ross-McKee / Payroll Administrator / PEO Canada