This story originally appeared on Conseiller.ca.
CRA has officially apologized to taxpayers unduly penalized by the Canada Child Tax Benefit (CCTB) rules.
The Agency sent a letter to parents who have seen their CCTB unfairly cut by hundreds, even thousands, of dollars.
More than 20,000 taxpayers, mainly former single parents, will have their revised benefits calculated starting November 20, 2012. According to the Centre québécois de formation en fiscalité (CQFF), which discovered the miscalculation, affected taxpayers should recover an average of $1,531 each.
New CCTB rules, effective June 2011, had eliminated the grace period granted to include a new spouse’s income in the calculation of family income for the CCTB. These new rules should have applied to marital status changes that occurred after June 2011. But CRA applied these rules to “CCTB payments made after June 2011 rather than marital status changes after June 2011,” says the CQFF.
The result: “CRA wrongly siphoned CCTB payments from persons whose marital status changed between January 1, 2011 and June 30, 2011.”
The CQFF says CRA initially denied there was an error and refused to remedy the situation. CQFF subsequently alerted the media and pressured the CRA to correct the mistake.
“We are relieved and happy to see this problem will be resolved soon and that all taxpayers affected will be made aware of the facts and be able to correct their situations,” commented CQFF.