Alberta Family Employment Tax Credit (AFETC)
BUDGET 2015 CHANGES
The Alberta Family Employment Tax Credit in Alberta is being enhanced beginning in 2016. Also in 2016, Alberta will be introducing a new refundable tax credit, the Alberta Working Family Supplement. Please see the following for details:
Please do not contact the Canada Revenue Agency (CRA) about Alberta Budget 2015 changes. These changes are not yet being administered by CRA as they will not take effect until July 1, 2016.
The Alberta Family Employment Tax Credit is administered by the Canada Revenue Agency along with the Canada Child Tax Benefit (CCTB). Click here for general information and payment dates, or use the online calculator.
For help with your current AFETC account, please call:
1-800-959-2809 (toll free)
The AFETC Program
The Alberta Family Employment Tax Credit (AFETC) is a program funded by the Alberta government to help working families provide for their children. The AFETC supports families financially and encourages self-reliance and stability. In 2015-16, the Alberta Family Employment Tax Credit will provide about $116 million in tax relief to about 137,000 Alberta families.
The program has two objectives:
- to support children in low and middle income families, and
- to provide incentive for the parents of these children to continue to work.
If you meet the following criteria, you qualify for the AFETC:
- Resident of Alberta for at least one month,
- Parent of one or more children under 18,
- More than $2,760 annual family working income, and
- A family net income of less than $55,628 for families with one child, $72,753 for families with two children, $83,028 for families with three children, and $86,453 for families with four or more children.
You do not need to apply for the AFETC. Your eligibility will be determined from the information the federal government uses for the Canada Child Tax Benefit (CCTB).
The amount you receive for the AFETC is based on the information you and your spouse (if you have one) provided on last year's income tax return. If you qualify, a notice will be sent to you each year near the end of July, along with your first payment. The notice will show how your payment was calculated as well as how much you will receive the following January. Your return(s) must have been assessed by the Canada Revenue Agency to qualify.
If you have a child in the future, your application to the Canada Revenue Agency for the CCTB will automatically be used to determine your AFETC.
You could receive up to a maximum of $1,987 for your family for the twelve month period beginning July 2015. The maximum amounts (as of July 1, 2015) are as follows:
- first child - $754;
- second child - $685;
- third child - $411;
- fourth child - $137.
The tax credit is calculated at a rate of eight per cent of family working income above $2,760 up to the maximum amount. It is reduced by four per cent of family net income over $36,778. To qualify, your family net income for the previous calendar year would have to be less than $55,628 for families with one child, $72,753 for families with two children, $83,028 for families with three children, and $86,453 for families with four or more children. In July of each year, the maximum credit amounts are indexed to inflation. This ensures that the value of the credit is not eroded over time
Your family's working income is the combined earned income of you and your spouse (if you have one), including income from self employment. It does not include income from sources such as alimony and child maintenance.
Your family's net income is your family's total income minus your registered pension plan and RRSP contributions, annual union dues, child care expenses, moving and other expenses (as found on line 236 of your federal income tax form).
AFETC payments are made to the same individuals who receive the CCTB payments. In general, the payment is made to the individual who is primarily responsible for the care of the child. When both a male and female parent lives in the same home as the child, the female parent is usually considered to be primarily responsible for the child. Individuals who are considered shared-custody parents for the purposes of the CCTB will also be considered shared-custody parents for the AFETC.
Payments will be mailed, or deposited directly into your account, near the end of January and July. These will be advance payments - the January payment will cover the first six months of the year, the July payment the second six months. If your credits under the program amount to less than $20 a year, you will receive only one payment for the full year.
If your family leaves Alberta during a six-month period for which you have already received payment, you will have to return the money you received for those months you were not living in the province.
If you currently use the direct deposit service from Canada Revenue Agency for your CCTB, your AFETC will be deposited into the same account. If you receive your CCTB by cheque, a separate cheque will be sent for your AFETC.
For information on how much you may be entitled to receive for the Alberta Family Employment Tax Credit and the Canada Child Tax Benefit (CCTB), please see the online calculator on the Canada Revenue Agency website. Please note: you will need your personal income tax return and supporting documents to enter specific amounts.