Harper unveils income splitting for Canadian families

Prime Minister Stephen Harper has announced income splitting for families with kids under 18 that will allow an eligible taxpayer to transfer up to $50,000 of income to his or her spouse for tax purposes in order to collect a non-refundable tax credit of up to $2,000 per year.

The so-called “Family Tax Cut” will allow an eligible taxpayer to transfer up to $50,000 of income to his or her spouse for tax purposes in order to collect a non-refundable tax credit of up to $2,000 per year.

Harper says the Conservative government is also boosting the universal child care benefit — $160 a month for kids under six, up from $100, plus a new monthly benefit of $60 for children aged six through 17, effective in 2015.

Those two measures together will cost $3.1 billion in 2014-15 and $4.5 billion in 2015-16.

The Conservatives made the income-splitting promise during the 2011 election campaign, but it was contingent on the federal books being balanced.

Harper has said the federal deficit in the past fiscal year would be $5.2 billion, a fraction of the $16.6 billion forecast, but insisted there won’t be a surplus until next year.

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