How does the taxation of the Universal Child Care Benefit work?
In February of each year, the Canada Revenue Agency issues a Universal Child Care Benefit statement to each recipient, indicating the total amount of Universal Child Care Benefit payments issued for their young children in 2006. If the recipient had a spouse or common-law partner on December 31, 2006, the Universal Child Care Benefit is taxable in the hands of the spouse or common-law partner with the lower net income and should be reported as income on his or her 2006 income tax return, regardless of which person in the household received the payments. Otherwise, the recipient should report the amount as income on his or her 2006 income tax return. For more information on how to file your income tax return, visit the Canada Revenue Agency Web site.
