Life-stage guide
Tax Benefits When You Have a Baby in Canada
Having a child triggers some of the most substantial tax benefits available to Canadian families. The Canada Child Benefit, EI parental leave, child care deductions, and the RESP grant system can put tens of thousands of dollars into your household over the years — but only if you apply for them correctly and use them strategically. Here is what you need to know from the moment your child is born.
Canada Child Benefit (CCB)
The Canada Child Benefit is a tax-free monthly payment from the federal government to eligible families raising children under 18. It is the single largest financial benefit most families receive after having a child.
2025–26 amounts
- Up to $7,787 per year ($649/month) for each child under age 6
- Up to $6,570 per year ($547/month) for each child aged 6 to 17
These are maximum amounts. The CCB phases out based on adjusted family net income (AFNI). The phase-out starts at $36,502 for one child and $36,502 for additional children, with steeper reductions above $80,000. High-income families receive a reduced or no benefit.
How it is calculated
CRA recalculates your CCB every July based on the previous year's tax returns. This is one of the most important reasons to file your taxes on time — even if you owe nothing, delayed filing delays your CCB payments. Both parents must file annually for CCB to continue.
How to apply
Use the Automated Benefits Application (ABA) when registering the birth in most provinces (including Ontario, BC, Alberta, and others). The province shares the birth registration with CRA, which triggers automatic CCB assessment. If ABA is not available or you missed it, apply through CRA My Account or mail Form RC66 (Canada Child Benefits Application). You can apply at any time, but benefits are not retroactive more than 11 months.
Provincial child benefit top-ups
Most provinces provide additional child benefit payments on top of the federal CCB. These are administered and calculated alongside the CCB in many provinces:
- Ontario Child Benefit (OCB): Up to $1,647 per child under 18 per year (2025). Paid monthly with the CCB. Based on family net income.
- Alberta Child and Family Benefit (ACFB): Up to $1,330 for the first child plus amounts for additional children per year (2025). Paid quarterly with the CCB.
- BC Family Benefit: Up to $2,188 for the first child per year (2025). Single parents receive a supplement. Paid monthly.
- Quebec Family Allowance: Administered by Retraite Québec (not CRA), this supplement provides up to $2,782 per year for the first child.
These amounts are adjusted periodically. CRA administers the federal CCB and most provincial supplements together — you generally apply once and receive both.
Maternity and parental EI benefits
Employment Insurance provides income replacement during maternity and parental leave for qualifying employees. To be eligible, you must have accumulated at least 600 insurable hours in the last 52 weeks.
Types of benefits
- Maternity benefits: 15 weeks at 55% of insurable earnings (maximum insurable earnings: $65,700 in 2026, so maximum weekly benefit: $695). Available only to the birth parent.
- Standard parental benefits: Up to 35 weeks at 55% of insurable earnings. Can be shared between parents. The non-birth parent gets up to 35 weeks if the birth parent did not use all 35 weeks. Starts when maternity ends.
- Extended parental benefits: Up to 61 weeks at 33% of insurable earnings. Lower weekly payment for longer coverage. Can be shared.
The high-income EI clawback
If your net income exceeds $79,000 in the year you receive EI benefits, you must repay 30% of EI received (up to the amount you received in excess of certain amounts), unless it is your first year claiming benefits ever. This clawback is calculated on your tax return and can create a balance owing.
Taxation
EI benefits are taxable income. They appear on your T4E slip. Tax is withheld at source at a basic rate, but high earners or those with significant other income in the same year may owe additional tax at filing.
Quebec Parental Insurance Plan (QPIP)
Quebec residents are covered by QPIP rather than federal EI for maternity and parental benefits. QPIP offers higher replacement rates and more flexibility:
- Basic plan: Maternity (18 weeks at 70%), paternity (5 weeks at 70%), parental (32 weeks at 55% or 25 weeks at 70%)
- Special plan: Maternity (15 weeks at 75%), paternity (3 weeks at 75%), parental (25 weeks at 75% or 28 weeks at 55%)
Both parents must contribute to QPIP (through payroll deductions). Quebec workers opt out of federal EI parental benefits but remain in EI for other benefit types (illness, regular unemployment). QPIP benefits are taxable and reported on a Relevé 6 slip.
Child care expense deduction (line 21400)
Child care expenses paid to allow you (and your spouse) to work, attend school, or conduct research are deductible from income. This is a deduction, not a credit — it reduces the income on which your tax is calculated.
Annual limits per child
- $8,000 per child under age 7 at year-end
- $5,000 per child aged 7–16 at year-end
- $11,000 per child eligible for the Disability Tax Credit
Who can claim
The deduction must generally be claimed by the lower-income spouse. The higher-income spouse can only claim in specific situations: the lower-income spouse was in full-time education, was in a hospital or similar institution, was incapable of caring for children, was imprisoned, or was separated for at least 90 days.
What qualifies
Daycare centres, babysitters, after-school programs, day camps, overnight camps (limited), boarding schools (limited), and caregivers who provide child care so you can work. The provider must give you a receipt showing their name, address, SIN (for individuals), and the amount paid. Payments to the child's parent or to a non-resident do not qualify.
Disability Tax Credit and Child Disability Benefit
If your child has a severe and prolonged physical or mental impairment, they may qualify for the Disability Tax Credit (DTC). The DTC is a non-refundable credit, and if the child cannot use it, it can be transferred to a supporting person (parent or guardian).
The federal DTC for a child under 18 includes the basic disability amount plus a supplement for children — approximately $14,800 in total eligible credits for 2026, saving roughly $2,200 in federal tax.
More importantly for many families, DTC eligibility also unlocks the Child Disability Benefit (CDB): a tax-free monthly payment added to the CCB. For 2025–26, the CDB is up to $3,322 annually per eligible child. This benefit is income-tested and phases out above family income of approximately $75,000.
To apply for the DTC, complete Form T2201 (Disability Tax Credit Certificate) with a licensed health professional who certifies the nature and severity of the impairment. Submit to CRA for approval before claiming the credit.
RESP: free government grants for your child's education
A Registered Education Savings Plan (RESP) is a tax-sheltered account to save for a child's post-secondary education. Contributions are not tax-deductible, but investment growth is tax-sheltered inside the plan. When withdrawn for education, the investment income is taxed in the student's hands — typically at a very low or zero rate.
Canada Education Savings Grant (CESG)
The CESG is a government grant automatically added to your RESP contributions:
- 20% on the first $2,500 contributed per year, for a maximum of $500/year
- Lifetime CESG limit per child: $7,200
- Grant room accumulates from birth to age 17 and carries forward — if you skip a year, you can catch up by contributing more the next year (up to $5,000 to receive $1,000 in CESG)
Additional CESG for lower-income families
Families with adjusted family net income below approximately $53,000 receive an additional 20% on the first $500 contributed per year (an extra $100). Families with income between $53,000 and $100,000 receive an additional 10% on the first $500 ($50 extra). This means some families receive up to $600/year in grants on a $2,500 contribution.
Canada Learning Bond (CLB)
Families with income below approximately $50,000 (the threshold varies with family size) whose child qualifies for the National Child Benefit Supplement are also eligible for the Canada Learning Bond — $500 in the first year and $100/year each subsequent year up to age 15, for a lifetime maximum of $2,000. No RESP contribution is required to receive the CLB — just open the account.
Provincial grants
Several provinces have additional RESP incentives, including the BC Training and Education Savings Grant ($1,200 for BC residents born after 2005, no contributions required) and Quebec Education Savings Incentive (10% on first $2,500/year contributed).
Frequently asked questions
How do I apply for the Canada Child Benefit?
The fastest way is through the Automated Benefits Application (ABA), available in most provinces when you register your child's birth. When you complete the provincial birth registration, you authorize that province to share information with CRA, and CRA automatically assesses your CCB eligibility without a separate application. If the ABA is not available in your province, or if you missed it, apply through CRA My Account or mail in Form RC66. You can apply at any time — benefits are not retroactive beyond 11 months.
Is parental leave EI income taxable?
Yes. EI maternity and parental benefits are fully taxable. Tax is withheld at source, but often at a lower rate than your employment income. If your combined EI income and return-to-work income in the year is higher than expected, you may have a balance owing when you file. Consider asking Service Canada to withhold additional tax when you first apply for EI.
Can I claim child care expenses if I paid cash to a nanny?
You can claim child care expenses even if paid in cash, but you must have the provider's Social Insurance Number (SIN), their address, and the amount paid. The provider is also required to report the income. Cash payments without documentation are not deductible and expose both you and the caregiver to CRA scrutiny. Use a written contract and keep records of every payment.
What if both parents have income — who claims child care expenses?
The lower-income spouse or common-law partner must generally claim child care expenses. The higher-income spouse can only claim in limited circumstances, such as when the lower-income spouse was in school, was ill, or was incarcerated. There are specific forms and conditions for these exceptions.
When should I open an RESP?
As early as possible — ideally before your child's first birthday. The Canada Education Savings Grant (CESG) contributes 20% on the first $2,500 contributed per year, for a maximum of $500/year. Room accumulates from birth but unused grant room carries forward only to age 17 (with conditions). The earlier you start contributing, the more grant dollars you accumulate and the longer the money has to grow tax-sheltered.
What is the Child Disability Benefit?
The Child Disability Benefit (CDB) is a tax-free monthly payment added to the CCB for families caring for a child under 18 with a severe and prolonged impairment. For 2025–26, the CDB is up to $3,322 per year per eligible child. Eligibility requires that the child's Disability Tax Credit (DTC) certificate (Form T2201) has been approved by CRA. Apply for the DTC as early as your child's condition allows it to be assessed.