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Why read this?

Your client is:

  • paying student loans;
  • adopting a child;
  • raising children; or
  • paying for kids’ extra-curricular activities

What to do

Claim interest on student loans

› Your client can deduct loan interest under the Canada Student Loans Act, the Canada Student Financial Assistance Act or similar provincial or territorial programs.

› Interest paid in the current or preceding five years is eligible for a 15% non-refundable credit.

TIP

Claim the corresponding provincial or territorial credit on Line 5852 of the appropriate province or territory’s Form 428.

› Enter the interest on Line 319 of Schedule 1.

Claim the family tax cut

› Your client can claim a non-refundable tax credit of up to $2,000 if her child lived with her through the year.

› The child must be under 18 at the end of the year.

› Complete Schedule 1-A, Family Tax Cut.

›› To start, enter the amounts on Line 46 and Line 350 of Schedule 1 on Line 1 and

Line 2 of Schedule 1-A, respectively.

›› Complete Schedule 1-A and enter the amount on Line 21 on Line 423 of Schedule 1.

TIP

To receive the maximum benefit, ensure your client and her spouse claim all applicable non-refundable tax credits on Schedule 1 of the return. “You should take all eligible credits to get your income before sharing as low as possible,” explains Mariani.

Anyone who’s declared bankruptcy in the year, or elected to split pension income, is ineligible.

TIP

Nfld., Ont., Man., Alta., B.C. and the Yukon also have adoption tax credits, says Dora Mariani of Segal LLP in Toronto. In Quebec, residents are eligible for a refundable credit up to $10,000, adds Sam Lackman of Nexia Friedman in Montreal.

Claim adoption expenses

› If your client adopts a child, she can claim a 15% non-refundable credit for expenses, to a maximum of $15,000 per child. It can be claimed by one parent or split between the two.

› Eligible expenses include adoption agency fees, legal expenses, travel costs and mandatory dues to a foreign institution.

› Enter total eligible expenses on Line 313 of your client’s return.

Expenses must be claimed in the year an adoption order is issued or recognized by the Canadian government, or when the child begins to live permanently with your client—whichever is later.

TIP

If your client’s child is eligible for the disability tax credit, your client can claim an additional $500. See “What to do for clients with disabilities”.

Claim the children’s art credit

› Your client can claim a non-refundable credit of up to $500 for expenses related to children’s art activities.

› The child must be younger than 16 and enrolled in an activity that’s at least eight weeks long, with one lesson per week. Summer camp qualifies if it’s at least five days long and 50% of the time is spent on creative activities.

› Enter the total amount of expenses on Line 370 of the return.

Sources: Dora Mariani, CA, CPA, CFP, TEP, principal, Segall LLP; Sam Lackman, CPA, CA, manager, Tax, Nexia Friedman; CRA; KPMG’s “Tax Planning for You and Your Family 2015.”