Child Tax Benefit Increase 2021: Everything You Need to Know

Wondering if there’s a child tax benefit increase in 2021? Stop wondering and start preparing to receive it!

The efforts of the Canadian government towards improving the standard of living of children can’t be overemphasized.

Considering the impact of the COVID-19 pandemic on the well-being of Canadian children, the federal government expanded its child tax benefit coverage and budget in May 2020.

But are you eligible to receive the child tax benefit increase 2021? How much child benefit will you get?

Continue reading to find answers to these and lots of other questions.

What is Child Tax Benefit?

Canada Child tax benefit (CCTB) was a tax-free payment administered by the CRA to help low-medium-income families supplement the cost of raising their children under the age of 18.

The program was established in 1998 and replaced by Canada Child Benefit (CCB) in 2016.

However, the CCB is still referred to as child tax benefit today.

CCB aims to enhance the CCTB coverage to accommodate more low-middle-income families in Canada.

As you continue reading, you will learn more about the child tax benefit increase 2021.

Who is Eligible for the CCB?

As mentioned earlier, the child tax benefit was replaced by the Canada Child Benefit in 2016 to improve coverage.

So to qualify for the child tax benefit increase 2021, you must meet the CCB eligibility. That’s, you must:

  • Be a Canadian taxpayer
  • Live with under 18-years old child
  • Be the major person responsible for the upbringing and child the child.
  • You or your spouse/common-law partner must be a Canadian citizen or a permanent resident.

Is the Child Tax Benefit Going Up in 2021?

As I mentioned earlier, the federal government has in May 2020 expanded the coverage of the Canada Child Benefit, leading to a child tax benefit increase 2021.

This increase was due to the adjustment for inflation caused by the COVID-19 pandemic.

Consequently, eligible families may get up to a $1,200 increase on their 2021 CCB deposit under the CCB young child supplement (CCBYCS).

Continue reading to learn more about the various children tax benefit increase 2021.

When to Apply for the CCB?

According to the Canada Revenue Agency, the best time to apply for the Canada child benefit (CCB) is when:

  • You have an additional child in your custody (whether newborn child or otherwise).
  • There’s a change in your custody arrangement.
  • You or your spouse/common-law partner meets the CCB eligibility.

Not until then, you can’t enjoy the child tax benefit increase 2021.

How to Apply for the CCB

To receive the child tax benefit increase 2021, you must apply for the Canada Child Benefit (CCB).

The CRA provides three options that you can use to apply for the CCB. These are through:

1. Birth Registration

When you have a newborn child, you can apply for the CCB upon registering them to your province or territory.

Often, this is handled at a birthing center or hospital. But if you’re a British Columbia, Ontario, Alberta or Quebec resident, you can register online.

During your childbirth registration, you will be required to provide your social insurance number (SIN) and consent for your information to get to the CRA. Else, you have to apply for the CCB through other means.

2. Your CRA My Account

This option is suitable for those that didn’t apply for the CCB during their children’s birth registrations.

If you’re one of them, you need to follow these steps to apply for the CCB:

  • Visit your CRA My Account
  • Navigate to “Apply for child benefits.”
  • Confirm that your contact information is accurate.
  • Provide the name, gender, place and date of birth of your child.
  • Ensure all your information is correct before submitting your application.

3. Mail

If you didn’t apply for the CCB through your childbirth registration or your “CRA My Account,” you could do so through mail.

Here are the steps you need to follow when applying for the CCB through mail:

Note: If you apply for the CCB online, you will get your first payment within eight weeks. But it will take up to 11 weeks to receive your payment when you apply through mail.

CCB Payment Dates 2021

Once you applied for the Canada Child Benefit, the next thing is to anticipate payment such as the child tax benefit increase 2021.

The CCCB payment dates 2021 are as follows:

  • May 20, 2021
  • June 18, 2021
  • July 20, 2021
  • August 20, 2021
  • September 20, 2021
  • October 20, 2021
  • November 19, 2021
  • December 13, 2021

It’s important to note that not everyone receives CCB monthly payments. While some may receive monthly payments, others may receive one lump-sum payment.

How to know whether you will receive a monthly payment or one lump-sum payment? Your entitled amount says so.

If your entitled CCB amount is below $240, you will receive one lump-sum payment instead of a monthly payment.

As you continue reading, you will know how the Canada Revenue Agency (CRA) calculates your entitled amount.

Contact the CRA when you didn’t receive your payment after five working days from the due payment date.

But if your payment stopped or changed, these may be the reasons.

Special CCB Increase 2021

Due to the impact of the COVID-19 pandemic on low-medium-income Canadian families, the federal government decided to increase the CCB payment known as the child tax benefit increase 2021.

So about $2 billion was budgeted in May 2020, leading to a $300 CCB increase for each eligible child.

With CCB increase 2021, eligible families can now get up to $1,200 for each child below the age of six.

This increase will go a long way in helping many Canadian families offset the increasing cost of raising their children.

As you continue reading, you will learn more about the CCB increase for 2021.

Canada Child Benefit Young Child Supplement (CCBYCS)

The Canada Child Benefit Young Child Supplement (CCBYCS) is part of the federal government’s child tax benefit increase 2021.

With the (CCBYCS), Canadian families with less than $120,000 net income may get up to $1,200 for each child below the age of six.

Accordingly, each eligible child will receive up to $300 three times in 2021.

However, high-income families will get $600 CCBYCS which amounts to a $150 payment per eligible child three times in 2021.

The CCBYCS doesn’t require an application. Once you’re a CCB beneficiary and file your 2019 and 2020 tax returns, you will receive it.

Furthermore, CCBYCS is non-taxable, and it targets more than 1.6 million families and over 2.1 million children.

Canada Child Benefit Young Child Supplement (CCBYCS) Payment Dates for 2021

Here are the Canada Child Benefit Young Child Supplement (CCBYCS) payments for 2021:

  • May 28, 2021
  • July 30, 2021
  • October 29, 2021

As you can see, the CCBYCS differ from the CCB payment dates. So be ready to receive the payments differently.

However, if you didn’t receive your CCBYCS payment ten working days after the due dates, you should contact the CRA.

Furthermore, inform the CRA about any changes in your situation. Your payments may stop if you refuse to do so.

Annual CCB July 2021 Increase

Besides the above child tax benefit increase 2021, beneficiaries of CCB may also notice an increase by July 2021.

This is due to the inflation index that seeks to adjust the CCB payment with the cost of living in Canada.

Thus, the federal government adjusts the CCB payment annually from July, the beginning of the CCB year.

Consequently, families with children less than six years old may notice an increase from $6,765 to $6,833 in July 2021.

On the other hand, families with children between 6 to 17 years will notice an increase from $5,708 to $5,765 in July 2021.

So regardless of the age of your children, the CCB July 22021 increase is slightly higher than the previous amount.

Nevertheless, this increase will add up in offsetting the cost of raising your children in Canada.

How Much CCB Will You Get?

With the child tax benefit increase 2021, it’s essential to know the total amount of CCB you will get in 2021.

Thus, the amount of Canada Child Benefit you will get in 2021 depends on the:

  • The number of children in your custody
  • Your children’s age
  • The adjusted net income of your family
  • Your marital status

The CRA used the above factors to determine your CCB payment every July. In the end, you may receive lower or higher payments based on those factors.

However, it’s important to note that the amount of CCB you’re entitled to will reduce as the adjusted net income of your family increases.

This is so because the CCB aims at helping low-medium income families in Canada.

So the more you shift away from the low-medium income bracket, the less the CCB favours you.

Nevertheless, it’s always important to know how much you will get ahead of the CCB payment in order not to end up with surprises or disappointments.

So you can use the child and family benefits calculator to know how much CCB you will get annually or monthly.

Additional Child Benefits in Canada

As mentioned earlier, your Canada Child Benefit (CCB) payment may consist of provincial or territorial benefits programs.

This means you are not limited to one benefit under the CCB but several benefits once you’re qualified.

Receiving the CCB payment with additional provincial/territorial programs means more than the average CCB payment.

Here are some provincial/territorial programs administered together with the CCB:

Province/TerritoryProgram
New BrunswickNBCTB – New Brunswick Child tax benefit

 

Nova Scotia

 

NSCB – Nova Scotia child benefit

 

Newfoundland and LabradorNLCB – Newfoundland and Labrador child benefit
NunavutNCB – Nunavut child benefit
Northwest TerritoriesNTCB – Northwest Territories child benefit
OntarioOCB – Ontario child benefit
British ColumbiaBCECTB – BC early childhood tax benefit

 

YukonYCB – Yukon child benefit

 

However, additional benefits for provincial or territorial programs don’t require an application.

Based on your province or territory, your qualification will be determined by the CRA upon applying for the CCB.

Furthermore, your CCB payment may include child disability benefit if your child qualifies for the disability tax credit.

Accordingly, each of your children that are eligible for the disability tax credit may receive $242.91 monthly from July 2021 – June 2022.

What to Do With the CCB Payment?

Now that you know about the child tax benefit increase 2021, how much you can get and the various payment dates, it’s essential to understand how to spend the money wisely.

The truth is, it’s up to you to decide how to spend the CCB payment. Thankfully, CCB is non-taxable, so you’ve more flexibility in spending it.

However, you can be smart on spending your CCB credit by offsetting your child’s cost of care and upbringing with it.

Investing in one of the best RESP plans in Canada could be a cost-effective approach to offsetting the cost of raising your child with CCB payments.

With a registered education savings plan (RESP), you can have your children’s secondary schools savings growing tax-free in addition to government grants.

Furthermore, the flexibility of an RESP allows you to use it and invest in different securities that may yield high returns.

From stocks, bonds, ETFs to GICs – RESPs got you covered. However, before investing in any security, ensure that it aligns with your risk tolerance and investment objective.

Final Thoughts on Canada Child Tax Benefit Increase 2021

That’s all about the Canada child tax benefit increase 2021. So are you ready for it?

Benefits such as CCB are a good supplement to your income because you can use them the way you like without worrying about taxes.

With the 2021 Canada child tax increase, it’s essential you use the fund on things that matter.

But remember, to qualify for subsequent CCB payment plus other provincial/territorial benefits, you must file your tax annually. This also applies to your spouse or common-law partner.

Furthermore, as your situation changes, inform the CRA immediately so as to have your payment adjusted.

Let me know your thoughts about the Canada child tax benefit increase 2021 in the comment section.

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