Children over 18 up to 25 still going to school can receive the benefit and it is taxed in their name with the theory that little if any would be owed because their income is less than the basic CRA amount. Question, then why is this same theory not applied to Children up to 18? Is the benefit in their name and under whose name will it be taxed?
People under 18 don’t file income taxes and the gov. wants their taxes.
That’s a good question to CRA. Call CRA customer service. They will definitely answer it. They always do.
Ok here’s the skinny. CRA has no concern over Service Canada. So they cannot answer question on who will be taxed. It depends who you get on the line at Service Canada and you will here several different answers. One is that they tell you to call CRA, another answe is that it is taxed in Parents name until 18 yrs. the other is it is in their name but sent to your bank account. Well the latter is correct. The money is deposited along with the parents CPPD and separate t4 slips are given by Service Canada in child’s name. Mystery solved. Not sure why no one on this forum had the answer. But then again not many in govt either. Be careful of misinformation. There are lots of it!
Why does CRA give t4s to children under 18?
It’s Service Canada giving out the slips. Therefore for CRA purpose it’s taxed in their name. So if under the exemption amount then tax free. That’s great.
I don’t think people under 18 do taxes so it seems like a waste of paper.
Anyone and everyone who makes over the federal basic personal amount of $11,635 (for 2017) will have to pay income taxes. The basic personal amount is a non-refundable tax credit amount, and like every other non-refundable credit, it is calculated on the lowest tax bracket rate of 15%. So if one made $11,000 in 2017, the basic federal tax credit will wipe that out and no tax is required. CRA will know how much one makes based on the companies/organizations they work for. Many people under 18 make money. Think of child actors/models/singers etc… So if a child does not make more than that, no CRA return is required. It’s not a waste of paper because Service Canada is only reporting that portion that they dole out and have no idea if there is other income for that child. If the monies were taxed in the parent’s name, then almost half of it would be lost to taxes. The purpose of the benefit is for the child and if the family can afford it, then put it towards RESPs, clothing, activities or whatever. When child turns 18, they will have to have a bank account because it will have to get deposited to their account.
Although most minors do not earn enough income to be required to file a tax return, many should if they are due a refund.
Do people over 18 need to file returns even if they don’t owe or get a refund?
Correct. If they had to pay any income tax taken out of their pay check from a job and they didn’t earn over the basic exemption they would get a refund. But if you paid no taxes then the exemption is moot. Ie if you earn zero dollars and paid in zero tax you can’t use the basic exemption as a tax credit.
So I’m allowed to stop filing taxes?
Apparently yes if you have no income over the exemption to claim.
It just occurred to me that I think I have to file if I want the GST rebate.
Yes as would those requiring child’s benefits.