Got Kids? Collect Your $1,200!

Here’s how to get your no-strings-attached, tax-exempt payment on top of your Canada Child Benefit to cover your child’s essentials…

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Finally, the kids are paying off.

Starting on May 28, the Canada Revenue Agency (CRA) is giving a little extra to young families with kids under the age of six.

If your family’s net income is less than $120,000, you could receive up to $1,200 per child. This no-strings-attached, tax-exempt payment comes in addition to your Canada Child Benefit (CCB), and, like the CCB, it’s designed to help you cover essentials for your child, such as healthy food, clothing, and educational materials.

When will you get your $1,200?

Quickly. The CRA is breaking the $1,200 into four $300 installments. The first two installments will hit eligible family’s account on May 28. The final two will arrive on July 30 and October 29, 2021, respectively.

How do you sign up?

In order to receive the extra $1,200, you must first enroll in CCB. Enrolling is super simple, as you just have to confirm your child’s information on your personal CRA account. You could also fill out and mail in form RC66 to your local tax centre if you prefer.

If you’re already enrolled in CCB, you just have to file your 2019 and 2020 taxes to access your extra money. That may sound like a carrot and stick tactic employed by the CRA to make us all do our taxes. And who knows? Maybe it is. But, according to the CRA, they need your tax return in order to figure out if your income level meets the program’s requirements.

For payments received in May, the CRA will look at your income threshold from your 2019 taxes (again, it should be lower than $120,000). For those in July and October, they’ll look at your 2020 tax filing.

If you haven’t filed your taxes, do them as quickly as possible. Even though we’re passed the tax deadline, the CRA will still look at your tax return to verify your family’s eligibility.

What if your net income is more than $120,000?

You might still get a little extra for children under six. For families whose net incomes are greater than $120,000, the CRA will give you half the normal payment, or $150 per installment for a total of $600.

What should you do with your $1,200?

The Canadian government wants you to use this money on essentials. So, before anything else, make sure you have your necessities covered, including food, child care, diapers, clothes, and healthcare.

Next, I’d focus on paying down high-interest debt, especially credit card debt that you’ve accumulated over the last year or so as you’ve been covering COVID-19 related expenses. Now might be a good time to look into a balance transfer card, which can help you move debt from a credit card with a high APR to a card with a lower interest rate.

Finally, I’d save any extra money either as an emergency fund or in your Tax-Free Savings Account (TFSA). By putting money in your TFSA, you can invest it in a solid ETF — one that will help you generate more wealth in the long-run. Just keep in mind, though I’m all for investing the leftovers, I wouldn’t prioritize investing over budgeting and saving for your child’s essentials. Cover those first, then invest the rest.

Covered your essentials? Now invest the rest of your CCB…

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada‘s market-beating team has just released a brand-new FREE report revealing five dirt-cheap stocks that you can buy today for under $49 a share.

Our team thinks these five stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.

Don’t miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

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.

More on Investing

Payday ringed on a calendar
Dividend Stocks

How to Convert $500 Monthly Investment Into $200 Monthly Income

If you want the stock market to give you regular monthly income, you have to invest in the stock market…

Read more »

falling red arrow and lifting

RRSP Investors: 3 Dividend Stocks to Buy on the Dip

Inflation has delayed retirement for Canadians. RRSP investors should buy cheap dividend stocks like Fortis Inc. (TSX:FTS)(NYSE:FTS).

Read more »

Growth from coins
Tech Stocks

Got $1,000? Buy These 3 Under-$20 Growth Stocks to Earn Higher Returns

These under-$20 growth stocks can deliver solid returns in the long run.

Read more »

worry concern
Dividend Stocks

3 Ultra-Safe Dividend Stocks for Jittery Investors

Motley Fool investors nervous about the market downturn should consider these ultra-safe dividend stocks that keep paying passive income no…

Read more »

Economic Turbulence

The TSX’s 1st Crypto ETF Lost $500 Million in 1 Day

The TSX’s first crypto ETF lost $500 million is one day and is down nearly 58% year to date.

Read more »

House Key And Keychain On Wooden Table
Dividend Stocks

Is the Real Estate Boom Finally at an End?

It might be hard to believe, but Canada’s decades-long housing boom might be at an end.

Read more »

stock analysis

RRSP Investors: 2 Oversold TSX Financial Stocks to Buy for Total Returns

Top TSX financial stocks look oversold right now for RRSP investors seeking attractive dividends and total returns.

Read more »


Got $500? 3 Undervalued TSX Stocks for Superior Returns

These undervalued stocks have strong potential for growth and will likely generate superior returns in the long term.

Read more »