What’s New for Tax Time for Your 2015 Return Due April 2016 If You Have Children?

It’s that most horrible time of year again: tax time. I got my forms in the mail and took a peek at the T1-General Guide. I don’t usually look at car accidents but somehow I can’t help but look at the tax guide once I see it sitting on the table….Here’s what I found that’s new for a 2015 tax return for filers who have children.

Why Did I Get a RC62 Universal Child Care Benefit Statement in the Mail?

If your children were 6 or older but younger than 18 you may have received payments last year of the revised Universal Child Care Benefit.  It may have been quite a while since you last received any UCCB and you may have forgotten that it is taxable. Or at $60/month per eligible child aged 6-17, you might not even have noticed the money landing in your account.

Now, unfortunately, since the election is long past, we have to pay the taxes on that money.

That’s right, they didn’t withhold any taxes at source but the “benefit” is taxable income in the hands of the lower-earning parent.

So I will get to pay back about half of what we received.

There is also no longer any non-refundable tax credit for having a child of any age.

You report the amount you received, which is reported in Box 10 of your RC62, on line 117 of your return if you are the lower-net-income spouse or common-law partner.

What Happened to My Federal Non-refundable Tax Credit for My Children?

You used to claim $2 255 per child of the appropriate age on the Federal Tax Schedule 1 form on line 367. (By the time you finished the math, it was only 15% of that amount, or $338.25 per child.) If you are looking for it on the 2015 schedule, you won’t find it.

The problem with the non-refundable credit was that if a family was really low income, they weren’t paying any tax so they could not apply the credit to save any money.

Starting in 2015, the credit has been removed and instead all families get a taxable Universal Child Care Benefit. If the family is really low income, they will not have to pay any tax on this benefit and therefore it will help them. If a family has a moderate or high income, they will have to pay back some or a lot of this benefit both as federal income tax and as provincial income tax.

If your income was $75 000 a year before the $720 a year benefit for your one 7-year-old child, you will probably only get a benefit of $483 after tax in Ontario, based on using the Ernst and Young 2015 online personal tax calculator.

That’s about $145 more than the old non-refundable tax credit gave you. But it’s a lot less than the $720 that the advertisements were bleating about before the election!

If your income was $200 000  a year before the $720 a year benefit for your one 7-year-old child, you will probably only get a benefit of $346 after tax in Ontario, based on using the Ernst and Young 2015 online personal tax calculator. That’s very close to the old $338.25 per child that the non-refundable tax credit covered.

New Tax Form: The T4-A(P) for the CPP Children’s or Child’s Benefit

Many taxpayers have been dismayed to open envelopes this month and find a new tax slip: a T4-A(P) for their child or children’s benefit received from the CPP because one of the child’s parent’s has died. In previous years the government did not automatically send out this slip.

You can read what needs to be done with the slip by the parent, or child, over on Helpful Crooks.

Stay tuned for more exciting tax news!

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Does your mail box suddenly start overflowing around this time of year with tax slips? Did you get any new ones this year? Please share your experiences with a comment.

Betting $2.62 to Try to Save $14.48 Or How I Like to Gamble By Using Xpresspost for Parcels

Recently, I had to mail back my radon gas detection kit to the lab to have the results analyzed. It was annoying to have to pay the postage to send the collection unit back but I understand that it wasn’t easy for the company to send it out prepaid: the test has to run for a year and postage rates can increase, and the postage rate will vary from different parts of Canada if the package is sent by Xpresspost and possibly by regular mail due to “fuel surcharges” and other peculiarities of the postal system. Anyway, when I went to the post office to mail it back the clerk offered me two choices: regular parcel post at $14.48 or Xpresspost at $17.10; I decided to gamble and use Xpresspost and here’s why.

Why is the Canada Post Fuel Surcharge Different for Regular Post VS Xpresspost Parcels?

One thing I noticed when I priced my options is that the fuel surcharge for regular delivery from Ontario to BC is $0.47 and for Xpresspost is $1.28. Given the distance is the same, that was a bit puzzling. I decided that maybe, and only maybe, the Xpresspost option puts the package on a plane and the regular post option puts the parcel on a train and that changes the amount they want to zing me with for “fuel.”

I was curious, though, so I checked sending the same package within my same city.
Ack! The fuel surcharge within the same city is also different! It’s $0.29 for regular parcel and $0.77 for Xpresspost. Do they use jet fuel to run the van with Xpresspost and diesel or gasoline in the one that the regular parcels are delivered by?

I checked the Canada Post website. It clearly explains that a different rate is charged for the Express Services than for the Non-Express Services. It explains what percentage is used for the fuel surcharge depending on the price of diesel fuel. But it does NOT explain why the percentage is different for Express vs Non-Express!

Do Canada Post Fuel Surcharges Ever Change and Decrease?

Well, according to their website, yes they do. (I was surprised too.)

It was a good thing I waited till February 1 to mail my parcel, because the fuel surcharge rate dropped from 9.25% to 8.5% on February 1 from January 31 for Express Services.

Who knew a day when the price of stamps did not change, could make such a difference to the “postage” to mail a parcel?

What Do I Mean When I Say I Gambled By Using Canada Post Xpresspost to Deliver My Parcel?

I discovered this quirk in the past. Canada Post Xpresspost parcels usually have an On-Time Delivery Guarantee. (You should check when buying this service for any exceptions in your case.)  If the parcel does not arrive on time, you should get “replacement service or credit equivalent to the shipping charges.”

I’m paying slightly more for Xpresspost than for Regular Post. $2.62 more to be exact. For that extra money, I can track my parcel to make sure it eventually gets there. That alone is worth something to me. But more importantly, I can have fun gambling.

If the parcel is delivered on time, I’m out the $2.62. But if they are late, I will get all of my cost refunded, if not in cash, then at least in stamps or a credit note to pay for my next parcel.

Sure, it’s not like winning LOTTO MAX. I won’t be able to retire on $14.48. But it’s not a $5 bet either and the odds of Canada Post delivering my parcel late are much, much better than of me picking a hugely winning ticket.

Did I Win My Canada Post Xpresspost Lottery?

Well, it’s getting really suspenseful. According to the Canada Post tracking website, my parcel was in Vancouver on the day it should be delivered but so far it doesn’t say if it made it to the destination or not. Until the date of delivery gets posted, I won’t know. I’ll update this article when I find out.

I have won this lottery in the past so I’m hoping to do so again!

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Do you ever play the Xpresspost or Priority Mail odds? Have you won any free deliveries? Please share your experience with a comment.