Starting in 2016, the government has been mailing out T4-A(P) slips reporting the 2015 payments of the CPP Child or Children’s Benefit. This has taken many parents and grandparents caring for the bereaved children by surprise. I checked with Service Canada and the CPP Children’s Benefit is taxable income: but there is a “But” that makes it not so bad. Here’s what to do if you received the T4-A(P) for the CPP Children’s Benefit.
Where Should the CPP Children’s Benefit or Child’s Benefit Be Reported on an Income Tax Return?
The CPP Children’s Benefit or Child’s Benefit amount for the previous year will be reported on a T4-A(P) slip in box 17 and in box 20.
This amount is reported on line 114 of the T1-General form.
WHO Should Report the CPP Children’s Benefit or Child’s Benefit on an Income Tax Return?
The Canada Revenue Agency website is very clear. It says
“Any benefits paid for your children are their income, even if you received the payment.”
It clearly states that the only person who should actually report the amount as income is the child.
The parent does not pay any tax on the amount.
When Should a Child File an Income Tax Return and Report the CPP Children’s Benefit or Child’s Benefit?
A child should file an income tax return when they meet the same criteria as other tax payers.
For example, if a child is 15 and has income to declare from a part-time job in the food services industry, then the child should file an income tax return. When they do so, they should also be reporting the income they earned from the CPP Children’s Benefit.
While the CRA website does not specifically discuss this issue, in general they do not expect the child to file an income tax return solely to report the CPP Children’s Benefit. They maximum possible benefit is well below the basic personal exemption amount allowed to all Canadians. Therefore the child would not have to pay any income tax on the CPP Children’s Benefit if it was their only source of income.
The CPP Children’s Benefit payment also does not entitle the child to any RRSP contribution room so there is no need to file a return for that purpose, either.
What Should I Do If I have further Questions About the CPP Children’s Benefit and My Tax Return?
Please remember I’m just a tax-paying parent myself: I don’t work for the government nor do I have any special contacts in the government. So…
For questions about the CPP Children’s Benefit, please contact Service Canada.
For questions about income taxes and the Children’s Benefit, please contact the Canada Revenue Agency.
You may also decide to contact a tax professional for guidance. I am NOT a tax professional and I have no education in tax matters.
- How to Apply for the CPP Children’s Benefit
- Changes to Tax Slips (T4-A(P)) for the CPP Children’s Benefit for Children Whose Parent Has Died
Were you surprised to receive a T4-A(P) for this amount? Please share your view with a comment.