The Canada Child Tax Benefit (CCTB) is a tax-free monthly payment made to eligible Canadian families to assist them with the cost of raising young children under age 18. This is a very beneficial benefit to young families as the payments can be used for any expense. The CCTB may include the National Child Benefit Supplement (NCBS), a monthly benefit for low-income families with children, and the Child Disability Benefit (CDB), a monthly benefit providing financial assistance for qualified families caring for children with severe and prolonged mental or physical impairments.

The benefit is paid out to parents monthly, depending on the number of children and the annual income of the household. For a first child, the basic benefit is $84.91/mth + $18.25/mth for being under 7 years of age for a total of $103.16. The basic benefit starts to be reduced when the household income reaches $30004/annually. For families with an annual income of less than $21,214, there is the National Child Benefit Supplement, depending on the family income and number of children. Generally, for the first or second child, the 'cutoff' for receiving the Child Tax Benefit is roughly $74,000 in annual household income. This does change for the third and subsequent children.

The application can be completed and sent in immediately following birth. It takes between 8-10 weeks to be processed IF completed accurately. Your situation is immediately evaluated taking into account the new addition to your family.) and your income tax return from the previous year. The previous year's income is used until June 30th. (This allows for the filing of tax returns) If you do not qualify using the previous year's income at the initial time of application, your situation will be re-evaluated every July using the most recent year's information, or when there is another addition to your family.) Your Child Tax Benefit could therefore change from year to year depending on the income tax returns filed every year.

Once your application has been processed, your benefits will take effect as of the month after your baby was born. If the application was not processed in time for the first deposit, it will be retroactive to the month following your baby's birth. (Please note that there are cutoffs for preparing the next month's payment of benefits, so it could be 2 or 3 months after your baby is born before you start to see any benefits.)

Canada Child Tax Benefit Guideline Table effective July 2005 - June 2006

Based on February 23, 2005 Budget

Notes:

1. These calculations are assuming all children are over the age of 7. There is an additional supplement of $243 for each child under the age of 7. This additional supplement for children under the age of 7 is reduced by 25% of the amount of child care expenses claimed by the client or their spouse.
2. Slight variances exist for the basic benefit amount for residents of Alberta.
3. These amounts are for the Federal CCTB program (basic benefit plus National Child Benefit Supplement) exclusive of any amount to which a client may be eligible under any existing provincial or territorial benefit or credit program.
4. These amounts are only to be used as a guideline. All clients must keep Canada Revenue Agency informed of any changes to their family income, marital status, number of dependent children and current address.
5. These amounts do not include the Child Disability Benefit (CDB).

Are you eligible?

To be eligible to receive the CCTB, you have to live with the child and be a resident of Canada for income tax purposes.  Click here to be directed to an online application form http://www.cra-arc.gc.ca/E/pbg/tf/ctb9/ctb9-03e.pdf