The tax shield is a refundable tax credit intended to offset a decrease in the following work incentive tax credits brought about by an increase in your work income:
The tax shield is calculated based on your conjugal status and family income (your income plus that of your spouse on December 31, 2018). It has two components:
- one related to the work premium and the adapted work premium;
- one related to childcare expenses.
The work premium component can reach $600 for a couple. The childcare component can represent an increase of a few percentage points in the applicable tax credit rate. The exact amount of the tax shield is determined by adding the work premium and childcare components.
If both you and your spouse claim the tax shield, the total amount to which your couple is entitled will be split evenly between you.