Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Can the parents claim the child tax credit where the child is born or adopted in the same year as the child's death?
Reasons: Legislation and a question of fact
May 26, 2011
Newfoundland & Labrador TSO George A. Robertson
165 Duckworth Street Income Tax Rulings Directorate
PO Box 12075 Ontario Corporate Tax Division
St. John's NL A1B 4R5 905-721-5196
Attention: Mary Weir 2011-040389
Amount for children born in 1993 or later [known as Child Tax Credit] in year of birth-death
This is in response to your e-mail dated April 20, 2011 requesting our views on where a child passed shortly after its birth, could the parents be eligible to make the claim?
Our understanding of the facts is:
- The child never came home for the hospital and passed within hours of being born.
- Presumably, both a birth and death certificate would have been prepared.
- The child would not live at the hospital, only being confined to the hospital.
- There is every reason to believe that had the child not passed, the child would have come to its home to be raised.
Subparagraph 118(1)(b.1)(i) of the Income Tax Act (the Act) provides a child tax credit where
118(1) For the purpose of computing the tax payable under this Part by an individual for a taxation year, there may be deducted an amount determined by the formula
A × B
A is the appropriate percentage for the year, and
B is the total of, . . .
(i) a child of the individual ordinarily resides throughout the taxation year with the individual together with another parent of the child, $2,000 for each such child who is under the age of 18 years at the end of the taxation year, or [Emphasis added]
Paragraph 118(9.1) of the Act states:
(9.1) For greater certainty, in the case of a child who in a taxation year is born, adopted or dies, the reference to "throughout the taxation year" in subparagraph 118(1)(b.1)(i) is to be read as a reference to "throughout the portion of the taxation year that is after the child's birth or adoption or before the child's death". [Emphasis added]
Two previous interpretations reference the following
Subsection 118(9.1) indicates that if a child is born, adopted or dies during the year, the phrase "throughout the year" is a reference to "throughout the part of the year is after the birth or adoption or before his death," which confirms that the criteria for application of subparagraph 118 (1) (b.1) (i) may be encountered when a dependent child dies during the calendar year. [Emphasis added]
As for the meaning of "throughout the year" we appeared to conclude that the test must be met each day from January 1 to December 31 except where subsection 118(9.1) of the Act applied (i.e. the year of birth, adoption or death). [Emphasis added]
Generally, a child confined to a hospital throughout the year who would otherwise reside with one or both parents would still meet the requirements for the Child Tax Credit, provided the other criteria has been fulfilled. Where a child was born and died in the same tax year, one of the parents could claim the child tax credit based on the greater certainty definition of "throughout the year" in paragraph 118(9.1) of the Act.
We hope that these comments will be of assistance to you.
Ontario Corporate Tax Division
Income Tax Rulings Directorate
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