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The Child Benefit You Got was Not an Error

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The Child Benefit You Got was Not an Error

So a lot of people are wondering why money showed up for the Canada Child Benefit (CCB) yesterday (May 20) when they normally don’t qualify.

The CCB “one-time payment” for COVID-19 relief is actually formula driven but it is created by adding $3,600 for each additional child (not $300)… you’ll see in a minute why this is.

Step 1 – Add up the number of children that were under 6 years old in 2018 and multiply by $6,639.00

Step 2 – Add up the number of children that were between 6 and 17 years of age in 2018 and multiply by $5,602.00

This is your normal ANNUAL Canada Child Benefit entitlement before reductions.

However, for your May 2020 payment only, the formula adds $3,600 per child to bring the numbers to $10,239 and $9,202 per child based on age respectively.

If you have less than $31,120 of adjusted household income, you will get the full $300 extra, congrats, no more math for you.

For the rest of you it gets interesting or complicated, depending how you view math.

Any amount of adjusted household income between $31,120 and $67,426 causes your ANNUAL entitled CCB to be reduced by the following:

  • 7% of the amount of household income if you have 1 child
  • 13.5% of the amount of household income if you have 2 children
  • 19% of the amount of household income if you have 3 children
  • 23% of the amount of household income if you have 4 children or more

This is called the “first reduction”.  The maximum amount of household income subject to the first reduction formula is $36,306 more than the base $31,120 (meaning an income of $65,976)

Those of you over this number, you are not done yet.

Any amount of adjusted household income over $67,426 causes your ANNUAL entitled CCB to be reduced by the following:

  • 3.2% of the amount of household income if you have 1 child
  • 5.7% of the amount of household income if you have 2 children
  • 8% of the amount of household income if you have 3 children
  • 9.5% of the amount of household income if you have 4 children or more

This is called the “second reduction”.  There is no maximum amount of household income subject to the second reduction formula.  You keep calculating until you hit zero.

For example.   If you have one school-aged child in 2018, and your adjusted household income is $100,000 the formula would be this:

NORMAL MONTHLY BENEFIT:

  • First reduction: 67,426-31,120 = $36,306 x 7% = $2,541.42
  • Second reduction: 100,000-67,426 = $32,574 x 3.2% = $1,042.37
  • 1 child: $5,602
  • $5,602.00 minus $2,541.42 = $3,060.58 minus $1,042.37 = $2,018.21
  • $2,978.21 divided by 12 = $168.18/month CCB as a Normal Benefit

COVID19 MAY 2020 BENEFIT:

  • The first two reduction steps are the same but that 1 child is $3,600 more
  • 1 child: $9,202
  • $9,202.00 minus $2,541.42 = $6,660.58 minus $1,042.37 = $5,618.21
  • $5,618.21 divided by 12 = $468.18/month CCB as a one-time Benefit  (an extra $300 like promised)

So yes… an extra $300 per child for those already getting the benefit already… but for those that were not getting it before, but filed in 2018… and had an eligible child… the formula is recalculated with the $3,600 ($300 per month) change, and so many more households in Canada will be seeing some sort of amount.

For example, the lowest amount possible to collect would be with one school-aged child ($9,202 formula).

  • Households that make up to $163,069 will receive the full $300 for this child.
  • Households between $163,069 and $275,569 will receive less than $300 on a sliding scale from the Second reduction.
  • Households over $275,569 in this scenario would receive zero.

So almost every household with eligible children in Canada will see something coming their way for the May benefit to help with the extra costs with no schools or dayhomes open.

Sincerely,
Your Friendly Neighbourhood Tax Nerds

CGL Strategic Business & Tax Advisors

 

 

 

 

 

CV of Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr can be found here.

 

CEO | Director, Canadian Tax Advisory CGL Strategic Business & Tax Advisors With the Income Tax Act always by his side on his smart-phone, Cory has taken tax-nerd to a whole other level. His background in strategic planning, tax-efficient corporate reorganizations, business management, and financial planning bring a well-rounded approach to assist private corporations and their owners increase their wealth through the strategies that work best for them. An entrepreneur himself, Cory started CGL with the idea that he wanted to help clients adapt to the ever-changing tax and economic environment and increase their wealth through optimizing the use of tax legislation coupled with strategic business planning and financial analysis. His relaxed blue-collar approach in a traditionally white-collar industry can raise a few eyebrows, but in his own words: “People don’t pay me for my looks. My modeling career ended at birth.” More info: https://www.CGLtax.ca/Litzenberger-Cory.html

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Alberta

WHL Roundup: Brayden Peters makes 27 saves, Hitmen open season with win over Rebels

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CALGARY — Brayden Peters made 27 saves for his first career shutout, and the Calgary Hitmen opened their Western Hockey League season with a 2-0 victory over the Red Deer Rebels on Friday.

Sean Tschigerl started the scoring at 14:30 of the first period, and Tyson Galloway added an insurance goal four minutes into the second for the Hitmen (1-0-0).

Ethan Anders stopped 29-of-31 shots for the Rebels (0-2-1), who are winless in three games to begin their year. 

OIL KINGS 4 TIGERS 2

EDMONTON — Dylan Guenther struck twice and Sebastian Cossa kicked out 32-of-34 shots as the Oil Kings (3-0-0) toppled Medicine Hat (2-1-0) to open their season with three straight victories.

This report by The Canadian Press was first published March 5, 2021.

The Canadian Press

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Alberta

Brier in the Bubble: Defending champion Gushue beats Epping in opening draw

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CALGARY — Some of the top men’s curling teams in the country returned to the ice after a long absence Friday as the Tim Hortons Brier kicked off in a bubble setting at the Markin MacPhail Centre.

The opening draw of the 10-day competition came on the heels of a successful Canadian women’s curling championship, the first of seven events to be played in the Canada Olympic Park hub.

Defending champion Brad Gushue picked up where he left off a year ago when he raised the Brier tankard in Kingston, Ont. The veteran skip from St. John’s, N.L., defeated Ontario’s John Epping 6-2. 

In other Draw 1 games, Saskatchewan’s Matt Dunstone dumped Nunavut’s Peter Mackey 10-2, Wild Card Two’s Kevin Koe beat Nova Scotia’s Scott McDonald 7-4 and Quebec’s Michael Fournier edged Greg Smith of Newfoundland and Labrador 7-6. 

The members of the Gushue rink last curled together as a foursome a year ago. The team won a couple bonspiels in Halifax last fall without Alberta-based lead Geoff Walker, who remained out west. 

There were few signs of rust in the preliminary-round opener. The team threw at a 91 per cent clip and Gushue was perfect at 100 per cent.

Canada second Brett Gallant made a brilliant triple takeout in the second end and jokingly waved to the cardboard cutouts stationed throughout the spectator-free arena.

The teams blanked the first three ends as they got a feel for playing on arena ice again. Epping was heavy on a hit-and-roll attempt in the fourth end that set up a Gushue draw for two. 

Ontario settled for a single in the fifth before a Gushue hit and roll set up another deuce in the sixth end. The teams shook hands after a Canada single in the ninth end.

For most teams, it was their first competitive game action in several months. A handful of tour events were played last fall before the pandemic forced the cancellation or postponement of most competitions.

Some provincial and territorial teams were able to play down in recent weeks, but most rinks were invited by their respective associations when championships were cancelled due to the pandemic.

Two more wild-card entries were added this year, boosting the field to 18 teams.

Players are staying in a hotel across the road from the WinSport Arena and are being tested for COVID-19 on a regular basis. Coaches and team alternates wore masks on the end benches. 

Electronic hog-line sensors on the stone handles were not used for the second straight event due to equipment delays as a result of the pandemic. The honour system was in effect.

Three draws were scheduled for Saturday. Preliminary-round play continues through Thursday night.

The top four teams in each pool will advance to the two-day championship pool starting March 12. The top three teams will move on to the playoffs on March 14. 

The second- and third-place teams will meet in an afternoon semifinal with the winner to play the first-place team for the championship. 

The Brier winner will earn $100,000 of the $300,000 total purse, return as Team Canada at the 2022 Brier in Lethbridge, Alta., and earn a berth in the Olympic Trials in November at Saskatoon.

The champions will also represent Canada at the April 2-11 world men’s curling championship in the Calgary bubble. 

Kerri Einarson won the Scotties Tournament of Hearts last weekend. She’ll represent Canada at the April 30-May 9 women’s world curling championship, which was added to the bubble calendar Friday.

This report by The Canadian Press was first published March 5, 2021. 

Follow @GregoryStrongCP on Twitter.

The Canadian Press

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