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CRA: Did You Claim Your $2,000?

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If you’re a parent, this year has been particularly hard. You still have bills to pay, kids to feed, but now are also playing the role of teacher, counselor, gym coach, along with the other dozens of hats you put on every day — all from your home, where you’re actually trying to make a living to support these future leaders.

It’s been stressful, to say the least, and while no one can erase the number this year has done to your sanity, the Canada Revenue Agency (CRA) is trying to make things at least a little easier. That’s through benefits, along with some other programs already around for parents.

The CCB benefit

Back in April, when COVID-19 first really began to hit home here in Canada, the government announced there would be an addition to the Canada Child Benefit (CCB). This benefit would see a one-time payment of $300 per child for the May 20, 2020, payment. This, of course, is on top of the other payments you should already be receiving.

Of course, there’s a simple solution if you’re not receiving these payments: file your taxes! If you’re a new parent, you may not have received these benefits, as you were using the extended tax-filing deadline, for example. But that meant the government didn’t know you now have a kid. Make sure you file, and you could be eligible for back payments! Just make sure you apply before Jan. 15, 2021.

The Ontario benefit

Ontario parents are going to see an extra $200 per child for those under 12 years of age before the year is out. Again, as long as you’ve filed your taxes, this should be added to your CCB payments. This was a way for the government to help parents get through the home stretch of the holidays with their children.

The new year

Meanwhile, for the rest of the country, 2021 could look much better, as the government hopes to stimulate the economy. An additional $1,200 in child benefits will be given out over four tax-free payments in 2021 of $300 each for families with a net income of $120,000 or less. So, again: file your taxes and let the government know you need those payments!

Invest that $2,000!

You now have $2,000 hopefully coming your way in 2021. That’s a lot of money you can invest. If this is for your kids, you can consider investing in the Registered Education Savings Plan (RESP), where the government will match 20% of your contribution up to a maximum $500, which would be a $2,500 contribution, per child.

A smart investment would be in strong stocks that you can buy and hold for decades, for when your child will need that money for education. Companies that likely aren’t going any where include stocks like banks, which have been around for hundreds of years. These also provide dividends, which you can use to reinvest in your child’s future.

If you were to invest in Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM), for example, you would receive a 5.22% dividend yield as of writing. That would bring in $105 in annual dividend income. Meanwhile, the stock has grown at a compound annual growth rate of 4.6% over the last five years. So, in two decades, you could turn that $2,000 into $21,134.84 without adding a penny if the bank moves in a similar way!

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned.

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