Do you have children that visit the dentist? Did you know that the Government of Canada now offers tax-free payments to help cover dental costs for eligible children? Dental costs can quickly add up, especially if you have multiple children.
The Government of Canada realizes the financial burden that dental care can place on families, which is why they created the Canada Dental Benefit to help eligible families cover the costs of dental services.
What is the Canada Dental Benefit?
Starting December 1, 2022 certain families may qualify for assistance to cover their children’s dental costs under the Canada Dental Benefit. This assistance program provides up to two tax-free payments of $650 per child for qualifying dental costs. The first period is for costs incurred between October 1, 2022 and June 30, 2023 while the second period is for dental expenses between July 1, 2023 and June 20, 2024. The credit begins to phase out as your household income increase according to the following structure:
- Families earning less than $70,000 of net income can receive up to $650 per child.
- Families earning between $70,000 and $79,999 can receive up to $390 per child.
- Families earning between $80,000 and $89,999 can receive up to $260 per child.
- Families earning over $90,000 receive no credit.
Let’s say your family earns $67,000 in net income and you have 2 children under the age of 12. You would be eligible to receive up to $1,300 for each of the two periods. Additionally, parents with joint custody agreements will be able to receive up to 50% of the credit each.
Who is Eligible for the Canada Dental Benefit?
There are eligibility requirements to keep in mind. To qualify for the Canada Dental Benefit, you must:
- Be receiving the Canada Child Benefit
- Have already filed your 2021 income tax return
- Earn less than $90,000
- Have a child under 12 as of December 1, 2022
- Have gone to the dentist between October 1, 2022 and June 30, 2023
- Not have a private dental insurance plan
- Not have 100% of your dental costs covered by another government-sponsored dental program.
How Do You Claim the Canada Dental Benefit?
The Canada Dental Benefit isn’t an automatic program, meaning you need to apply to receive tax-free payments. There is information you need to gather in order to apply, including:
- Dental provider’s name, address, and phone number
- Date of dental appointment
- Name, address, and phone number of your employer
- Name, address, and phone number of your spouse or common-law partner
Once you have this information, you can either apply online or by phone. There is an average 5 to 10 day processing time, regardless of which method you choose. The CRA also suggests you keep any records that validate eligibility for 6 years. If your application does need validation, you must respond within 30 days to avoid being liable for paying the money back.
Summary
The Canada Dental Benefit can ease the financial burden of dental services for eligible children. Understanding when you qualify, how to apply, and where to claim the payments on your tax return can be confusing. This makes it important to reach out to our team at NRK Accounting. We can work with you throughout the entire process. Reach out to a team member today to learn more.