I am a single mother and am claiming my 17 y/o son as a dependant. when I input his income from his p/t job I end up having to pay more in taxes...why?

[TurboTaxJeffrey · Accepted solution]

You are able to claim the Eligible Dependant amount of up to $11,327 for your son...however this is reduced by your son's net income.  Unfortunately claiming less credit will cause your tax liability to be greater.

Something that may help...you are able to claim the UCCB income as that of your son...yes, it would reduce your Eligible Dependant credit, however if your taxable income is greater than $44,701 then you will save more by reducing your taxable income.  Also, the provincial eligible dependant credit generally has a certain amount that the dependant can earn before the provincial credit is reduced, so even if your income is less than $44,701 you should still save on your tax liability.

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/305/rtrn-eng.html

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/117-eng.html

[jewel37]

so I claimed his income on my tax return...do I still file an individual return for him?

[TurboTaxJeffrey]

If his income, including the UCCB income, is less than $11,327, then you are not required to file a return for your son.  You may wish to prepare a return, to see if he might get some monies back, and you can make a decision at that point.  You are able to start returns without obligation of filing them, and you only pay for returns that you actually do decide to file.  Something to consider as well, and I am assuming that your son's income is from employment, is that by filing a tax return with this information, he is starting to create his RRSP limit, allowing him to potentially purchase RRSPs sooner rather than later.  This may not sound like an urgency, and may not be a large amount...but the magic of compound interest at the very least could allow your son to do what he wishes by the time he's my age.  Just a thought.

Whether you decide to file a 2015 tax return for your son or not, I would strongly encourage him filing a 2016 tax return, even if he owes nothing or gets nothing back.  If he turns 19 before April of 2017, then by filing his 2016 tax return he automatically applies for the GST credit, which he would receive once he turns 19.

[jewel37]

thanks so much Jeffrey, very good info!

[TurboTaxJeffrey]

Most welcome.