Family Tax Relief Backgrounder

February 18, 2013

A two-income family of four is now receiving approximately $3,100 per year in tax savings as a result of the Harper Government's actions since 2006. 

Calculation of total tax relief in 2012
for a two-income couple with two children
1
Benefits
($)
1. Goods and Services Tax (GST) rate reduction 2 960
2. Personal income tax measures
Increased tax value of non-refundable credits (evaluated at the 15% credit rate)
Child Tax Credit 657
Canada Employment Credit 329
Children's Fitness Tax Credit (CFTC)4 150
Children’s Arts Tax Credit (CATC)4 150
Public Transit Tax Credit (PTTC)4 156
Sub-total 1,442
Reduction in the lowest personal income tax rate from 16% to 15% 498
Increase in the upper limit of the first personal income tax bracket3 139
Basic Personal Amount3 66
Total personal income tax relief 2,145
3. Total tax relief 5 3,105

1 – It is assumed that one spouse earns $60,000 and the other spouse earns $40,000, for combined family total income of $100,000.  They claim deductions (for example, RRSP contributions, child-care expenses) equal to 10% of earnings, so their taxable incomes are $54,000 and $36,000 respectively, for combined family taxable income of $90,000.

2 – Average savings from the two-percentage-point GST rate reduction are estimated for families with total incomes in the range of $100,000.

3 – Tax relief from increases in tax parameters since 2006 above what they would have been in 2012 with indexation only.

4 – Assumes a CFTC claim of $500 for each child, a CATC claim of $500 for each child and a PTTC claim of $1,040 for the family.

5 – This family would receive an annual Universal Child Care Benefit (UCCB) payment of $1,200 (after-tax value of $1,020) for each child under 6, as well as $81 per year in increased Canada Child Tax Benefit (CCTB) payments.

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