It was announced last fall by Prime Minister Stephen Harper that couples who fall into different income tax brackets, who also have children under the age of 18, would be eligible to take advantage of a new tax credit, effective this year for the 2014 income tax returns. With up to $2,000 in non-refundable tax credit available for eligible couples, the Family Tax Cut is a way for couples to split their income and take advantage of a spouse’s lower tax bracket.
Couples who quality for the tax credit are able to transfer up to $50,000 of one partner’s taxable income to the other spouse, enabling the couple to take advantage of the lower tax bracket.
Unfortunately, many Canadian, particularly in British Columbia, do not qualify for the new Family Tax Cut. See the below infographic from BC Business for a detailed outline of which provinces will be benefiting the most from the new income splitting tax credit.
For more information on the Family Tax Cut, visit the Canada Revenue Agency (CRA) website.
Contact us at Winstanley Business Advisors for help with your 2014 income tax return.
(Infographic via BC Business)
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