Many Canadian families are missing out on receiving tax credits they're entitled to because they're not filing them on their income tax returns.
A recent survey by H&R Block found that families in Canada are not familiar with many of the child-related tax credits available to them and if they did file for the credit they didn't even notice that it had made a difference to their return.
"In the last few years, the federal government has enacted small changes to allow parents to save a little more on their tax bills," says Cleo Hamel, senior tax analyst with H&R Block. "If the survey results are anything to go by, it could be Canadian parents aren't seeing tax savings because they're not aware of the programs or because they're not aware they are eligible to claim the credits."
Overall, fewer than half of Canadians with children under the age of 18 in their household noticed that the new tax credits made a difference on their return.
Two thirds of Canadian parents don't know, for example, that they can claim up to $500 for the Children's Fitness Credit. Parents between the ages of 35 and 54 are more likely to be aware of the correct amount compared to parents between 18 and 34.
Parents can claim up to $500 for fees paid in 2012 for children who participated in an eligible program of physical activity, which could result in a savings of up to $75 on your tax bill this year. Eligible programs include strenuous games such as hockey or soccer, and other activities such as golf lessons, horseback riding, sailing and bowling as well as others that require a similar level of physical activity.
Children must have been under 16 years of age (or under 18 years of age if eligible for the disability amount) at the beginning of the year in which the eligible fitness expenses were paid.
Similarly, 69 per cent of parents did not claim the Children's Arts Tax credit. This credit is designed to encourage the participation of children in cultural, recreation and development programs in the fine arts, music, performing arts, wilderness training, language training, studying a culture, and tutoring.
Parents can claim up to $500 in eligible fees for enrolling a child under 16 at the beginning of the year in an eligible program. An additional amount of $500 is available for children with disabilities under the age of 18 at the beginning of the tax year.
Just under half of Canadian parents know that they can claim the Transit Pass tax credit for passes used by dependent children and 65 per cent of parents mistakenly believe that they can claim their children as a dependant while they attend post-secondary school.
"Unfortunately the government may be offering some small tax savings to parents but not everyone is taking advantage of the credits," Hamel says.
There are other areas where families are not taking full advantage of credits and deductions, often because they don't know they're eligible or they don't think it's worth the effort, Hamel notes.
Medical expenses are one area. You can claim a 15-per-cent tax credit if family medical expenses, including those of children under 18, exceed three per cent of your income, or $2,152, whichever is less. If the children are 18 or over and you pay for medical expenses you may be able to claim the receipts but the income threshold is based on three per cent of their income, not yours.
Often overlooked is the fact that health insurance premiums can be claimed as medical expenses. They often add up to half of the three per cent threshold on their own and if you pay a portion of your prescriptions and dental bills, the amount you pay also is a medical expense.
Hamel stresses that it's very important to keep receipts in order to back up and verify claims.
"The individual tax credits might not seem significant, but they can add up to a few more dollars in your pocket, and when you are raising kids, every little bit helps," Hamel says.
Talbot Boggs is aToronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.
