Baby’s Here — And So Is a Brand New Tax Situation
Having a baby changes everything. Including your taxes.
Whether you gave birth in 2025 or welcomed a new little one earlier in the year, your first tax season as a parent comes with new forms, new benefits, and a few surprises that catch most new moms off guard. Here’s everything you need to know before you file.
1. Your EI Maternity and Parental Benefits Are Taxable
This is the #1 thing new moms miss. EI maternity and parental benefits feel like a government gift — but they’re treated as taxable income.
You’ll receive a T4E slip from Service Canada showing the total EI benefits you received during the year. Every dollar goes on your tax return as income. If not enough tax was withheld at source, you may owe a balance come April.
2026 EI numbers at a glance:
- Maximum insurable earnings: $68,900
- Standard maternity/parental rate: 55% of average weekly insurable earnings
- Maximum weekly benefit: ~$728/week (standard option)
- Extended parental option: 33% of earnings, up to ~$437/week, over 61 weeks
Tip: If you had a full year of employment income before mat leave and then received EI for part of the year, your combined income might push you into a higher tax bracket. Ask the CRA or a tax professional to adjust your withholding on EI payments if needed.
2. Canada Child Benefit (CCB) — Free Money, But You Have to File to Get It
The CCB is one of the most generous benefits Canada offers families. It’s completely tax-free, paid monthly, and indexed to inflation each July.
2026 maximum CCB amounts (July 2025 – June 2026 period):
| Child’s Age | Annual Max | Monthly Max |
|---|---|---|
| Under 6 years | $7,997 | $666.42 |
| 6 to 17 years | $6,748 | $562.33 |
The full amount applies if your adjusted family net income is under $37,487. Above that, it gradually reduces — but most families with moderate incomes still receive a meaningful amount.
The catch: CCB is based on your previous year’s tax return. If you don’t file, you don’t get paid. That’s true even if you had zero income on mat leave — file anyway.
What to do right after birth: Apply for the CCB immediately through CRA My Account or by submitting RC66 (Canada Child Benefits Application). Don’t wait — the payments only start from when you apply, and you can only receive retroactive payments for up to 11 months.
3. Childcare Expense Deduction — Often Worth Thousands
If your baby is in daycare, a licensed home daycare, or cared for by a paid nanny, you can deduct those costs from your income. This is called the Childcare Expense Deduction (Line 21400).
2025 limits (for your spring 2026 return):
| Child’s Age / Status | Max Deduction Per Child |
|---|---|
| Under 7 years old | $11,000 |
| 7 to 16 years old | $5,000 |
| Child with a disability | $14,000 |
Important rule: The childcare deduction must be claimed by the lower-income spouse, with a few exceptions (if the higher earner is a full-time student, in prison, or medically unable to work).
Eligible expenses include:
- Licensed daycare centres
- Home daycare providers (not a family member under 18)
- Overnight camps (not day camps for childcare deduction, though day camps may qualify)
- After-school programs where childcare is the primary purpose
- Nannies and babysitters (they must have a SIN and you’ll need receipts)
Keep all receipts. The CRA does ask for them.
4. Medical Expenses — Don’t Forget Pregnancy Costs
Pregnancy and childbirth come with a lot of out-of-pocket costs that qualify as medical expenses. These include:
- Prenatal vitamins (if prescribed)
- Midwife or doula fees
- Hospital fees not covered by provincial health insurance
- Fertility treatments and IVF costs (significant deduction potential)
- Prescription medications during pregnancy
- Breast pump (if prescribed)
- Glasses or dental work done during the year
Combine all family medical expenses and claim them on the lower-income spouse’s return for the best result (lower 3% income threshold = more claimable).
5. Update Your GST/HST Credit and CCB for Your New Child
When you apply for the CCB (RC66 form), the CRA automatically updates your GST/HST credit to include your new child. If you haven’t applied yet, do it now — the CRA won’t add the child automatically.
Your GST credit amount is recalculated quarterly based on your family size and income, so adding a child can increase your payment.
6. RESP — Start Early, Even With Small Amounts
Not a tax deduction, but worth mentioning: RESP contributions don’t reduce your taxes, but they attract the Canada Education Savings Grant (CESG) — a 20% government match on the first $2,500 contributed per year, up to $500/year and $7,200 lifetime per child.
The earlier you open one, the more years of compounding and grant money you collect. Even $50/month from birth is worth more than $500/month starting at age 15.
Your New-Mom Tax Checklist
- ☑ Report EI maternity/parental benefits from your T4E slip
- ☑ Apply for CCB immediately (RC66 form or CRA My Account)
- ☑ Collect receipts for all childcare expenses paid
- ☑ Collect receipts for pregnancy-related medical costs
- ☑ Claim childcare deduction on the lower-income spouse’s return
- ☑ Pool medical expenses on the lower-income spouse’s return
- ☑ Update marital status and dependant information with CRA
- ☑ File on time — your CCB depends on it
The Bottom Line
Your first tax season as a mom is more complex than before — but it’s also packed with new benefits. The CCB alone can be worth over $7,900 per year, completely tax-free. Add childcare deductions, medical expenses, and RESP grants, and the financial support adds up significantly.
The key is to file on time and know what you’re entitled to.
Need help navigating your first year of parent taxes? Book a consultation with our team — we’ll make sure you claim everything you’re owed.