Child Tax Credit:

For 2007 and subsequent years, the 2007 Budget proposes to introduce a non-refundable Child Tax Credit for parents.

The 2007 Budget proposes that, where the child resides with both parents throughout the year, either parent would be entitled to claim the Child Tax Credit.
Any unused portion could be transferred to that parent's spouse or common-law partner. If the child does not reside with both parents throughout the year, the parent who is entitled to claim the amount for an eligible dependant will be able to claim the Child Tax Credit.

The CTC will be calculated by multiplying the lowest personal income tax rate for the year (15.5% in 2007) by $2,000 for each child (indexed after 2007). The calculation for non-refundable credits is 15 percent for 2007, so the Child Tax Credit actually results in a federal tax saving of $300 per child ($2,000 multiplied by 15%). It is claimed against the tax payable.

Taxpayers will claim the New Child Tax Credit when they file their 2007 return.

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