Media outlets are buzzing with news of the 2016 federal budget, but what's it mean for families with kids involved in sports? Some good, some not so good.
First the good - MORE DISPOSABLE INCOME.
Starting in July, the Universal Child Care Benefit (UCCB) and the Canada Child Tax Benefit (CCTB) will be replaced with one non-taxable Canada Child Benefit. It's estimated that most families in Canada will see an average increase in benefits of $2,300 starting in 2016.
Also starting this year, the middle class income tax bracket of 22% will be reduced to 20.5%. The middle class bracket is between $45,282 and $90,563. If your income is in this range - congratulations - you'll pay less tax. A single Canadian in this range will see an estimated average tax decrease of $300 per year, while couples will see an average reduction of about $540 per year.
So most Canadians will have more disposable income starting in 2016 and for years to come. That's good.
Now the not so good - NO MORE FITNESS TAX CREDIT.
Currently, for each child aged 15 and younger at the beginning of the year in which the expense was paid, families can get a tax credit of up to $150 through the Children's Fitness Tax Credit (up to $1,000 in eligible expenses). This credit will be phased-out in the next two years. There will be a 50% reduction of the maximum eligible expenses in 2016, and a complete elimination of the credit by 2017.
So many families will lose a tax credit of up to $150. That's not good (but could be worse).
TO SUM IT UP?
We argue the 2016 federal budget is good for families with kids involved in sports - in an indirect way. More disposable income means more money available to pay for lots of things, one of those being involvement in recreational sports activities. While the costs for these activities may keep going up, the hope is the additional income will be more than able to offset the increases - for a while anyways.
Thanks for reading.