If you have children, here are some ways to save money when you file your return.

This is tax preparation month in Canada, so for the next few weeks we’ll offer a series of tips that may help you to reduce your tax bill or increase your refund. Of course, not all these suggestions will apply to everyone, but take a moment to scan them. You may find one that you or someone in your family can benefit from. This week we focus on tips for families with children.

1) Claim the Canada Child Tax Benefit (CCTB). These tax-free monthly payments are available to families with children, but some parents don’t claim them because there is a widespread impression that they are only for lower-income people. That’s not the case; many middle-income families are eligible to receive payments that could amount to $100 a month or more, depending on the number and age of their youngsters. But to obtain the CCTB, you must do two things.

First, both parents must file a tax return every year, even if one has no income at all.

Second, you must submit a formal application. You can get all the details and download an application form at the Canada Customs and Revenue website. Go to: Click Here

Don’t wait to apply. Retroactive CCTB benefits are only available for 11 months. Also, several provinces offer their own child benefit programs, which supplement the CCTB. Check with your provincial government for details.

For the last half of 2002 and the first half of 2003, the basic CCTB is $1,169 per child. Children under seven get an extra $232, and a third child qualifies for an $82 bonus. Benefits are reduced for families with net income in excess of $33,487. These numbers are readjusted every July 1 for inflation.

2) See if you’re eligible for a dependant tax credit. If you do not have a live-in spouse or partner and are raising a child on your own, you are probably eligible to claim this tax credit. The technical name for it is “Amount for an eligible dependant” and it shows up at line 305 of the tax return. Although this credit is mainly used by single parents, it can be applied to some other close relative, such as a parent or grandparent, if you are supporting the relative at home and you have no spouse or partner. If the dependant had income of less than $650, you are allowed to claim an amount of $6,482 on your federal tax return.

3) Claim child care expenses. If you pay someone to look after your kids while you work and earn income, you can claim child care expenses when you file your return. You will need to include form T778. There are a lot of rules governing this claim, for example you cannot submit for expenses paid to a parent, other supporting person, or a relative under age 18. You must get receipts to claim these expenses, and this can be a sticking point. If the child is being cared for by an individual, that person must include his/her social insurance number on the receipt. Of course, many people balk at that because they want to be paid in cash, with no written record of the transaction, for reasons that are obvious. If you go along with this tax dodge, you’re the one that will suffer because CCRA will disallow your child care expense claim. So take the time to find a qualified child care provider who will give you the documentation that you require.

4) Take a close look at your medical expenses. Unfortunately, kids seem to get sick a lot. If there’s anything going around at school, they come home with it. That can run up medical bills for prescriptions. You may also have shelled out for dental care, glasses, and a host of other medical-related costs that aren’t covered by your provincial health care program or any employer or private health insurance you have. If these expenses exceeded $1,728 or 3% of net income, whichever is less, you can claim a tax credit for the difference at line 330. The lower-income spouse should always make this claim, since the three percent threshold will be less. For example, if one spouse earns $60,000 a year, only medical expenses in excess of $1,728 could be claimed by that person. However, if the other spouse earned $20,000 and made the claim, all expenses in excess of $600 would be allowed (3% x $20,000).

Here’s another important point. Your medical bills do not have to have occurred within the calendar year. You can use any 12-month period that ends in the tax year for which you are filing. That sometimes makes the difference in whether a family has enough eligible expenses to claim.

5) Check out the GST credit. The GST credit is available to all families. There is an income test involved, but if your family net income is not over about $41,000 and you have two children, you should receive something. Each qualifying adult is eligible to receive up to $216 a year, while children under 19 get $114 (first half of 2003). The payments are made quarterly and are adjusted every July to account for inflation.

The GST tax credit is often overlooked by older children, particularly college students. Everyone age 19 and up is eligible to claim the credit, if they meet the income test. However, students sometimes fail to enter a claim because they have little or no income and therefore don’t bother to file a tax return. They could be missing out on more than $200 in their pocket! If you have older kids, check it out. More details at Click Here