Frequently Asked Questions (FAQ)

The Canada Child Tax Benefit (CCTB) is one of the federal government's most important ways of providing financial assistance for families with children. It is a non-taxable benefit delivered through the tax system for eligible families with children under age 18. The CCTB has three components:

• The base benefit, which is targeted to low- and middle-income families.
• The National Child Benefit supplement, which provides additional assistance to low-income families.
• The Child Disability Benefit (CDB), which provides additional assistance to virtually all families caring for a child eligible for the disability tax credit (DTC).

As of July 2007, the maximum annual benefit for a first child is $3,271, plus the CDB for families with a DTC-eligible child. The CCTB is paid in monthly instalments. About 3 million families receive the CCTB.
For further information on the CCTB, click on the following weblink: http://www.cra-arc.gc.ca/benefits/cctb/menu-e.html.

The goods and services tax (GST) credit is a cash payment to low- and modest-income people to help them offset the cost of paying GST on things they buy. The GST credit is paid in quarterly instalments.

Effective July 1, 2008, the basic annual amounts are $242 per adult and $127 per child. There is also a supplement of up to $127 for single individuals and $127 for single parents.

Inside an RRSP, all investment income accumulates tax-free. Outside the plan, the different types of investment income - interest, dividends, and capital gains - are taxed differently. Interest income, from a savings account is taxed at your marginal rate, while dividends and capital gains receive preferential tax treatment. To build a non-registered portfolio, equity mutual funds are a tax-smart way to begin.