Claiming Child Care Expenses
If you pay for child care so that you can go to work or school, you may be able to claim those expenses on your tax return. Each child for whom you claim expenses must meet the Canada Revenue Agency's eligibility requirements.
The child must be younger than 16 years of age, be yours, your common-law partner's or spouse’s child and be dependent on you, your spouse or partner. And, the child's income cannot exceed $11,308.
Disabled dependent children can be any age as long as they are dependent on you, your spouse, or partner. Claiming child care expenses may reduce the amount of tax you have to pay.
How Much to Claim
Canadian taxpayers can claim up to $7,000 per child for children under the age of 7 years at the end of the year, and $4,000 per child for children aged 7 to 16 years. For disabled, dependent children of any age who qualify for the disability tax credit, the amount to claim for that child is $10,000.
You can claim $4,000 for a disabled child over the age of 16 who does not qualify for the disability tax credit but was still dependent on you and required care.
For a boarding school or overnight camp, you may only claim up to $175 per week for a child under the age of 7 years, $250 per week for an eligible disabled child, or $100 per week for a child aged 7 to 16 years, as of 2013.
You can claim child care costs paid to daycare centres, day nursery schools, caregivers such as nannies, day camps, and overnight boarding schools and camps that provide lodging. To be eligible, day camps and day sports schools must have a primary purpose of providing child care.
If you paid an individual person, such as a nanny or babysitter, you must provide her social insurance number. Note that the CRA requires proof of expenses in the form of receipts, and that you may be audited.
"Parents should take precautions when choosing a daycare or child care provider. One of these is to make sure ahead of time that proper receipts will be issued. Child care providers are required to issue receipts showing either their business number or social insurance number.
Ask for a receipt each month," advises Robert Stone, a personal tax professional and founder of Mr. Taxes.ca, Inc. "It is better to ask ahead of time than to try to get receipts at the end of the year."
Payments made to relatives under the age of 18 years -- such as your older children, or a niece or nephew -- cannot be claimed. If your employer reimbursed any portion of your child care expenses, that portion cannot be claimed.
Fees for swim lessons, Girl Scouts or other recreational programs are not eligible; they may be eligible for the children’s fitness or arts amounts. Medical or hospital care expenses, clothing costs and transportation costs are all ineligible. If you are claiming fees paid to an educational institution, such as a boarding school or sports program, the cost of tuition is not deductible, but the lodging portion is.
Child care provided by the child’s father or mother, your spouse or common-law partner also is not eligible.
Either you, your spouse or common-law partner can claim child care expenses. Single parents also can claim them.
With couples, the person with the lower income claims the expenses, unless one of the situations on Form T778 part C or D applies; for example, if the lower-income person is not capable of caring for the children for medical reasons, or because she's a full-time student.
These rules apply to Canadian citizens and residents, including immigrants to Canada. Canadian taxpayers who live and pay for child care outside of Canada also may claim child care expenses, subject to certain conditions. Again, obtain and keep receipts for all eligible expenses.
"The CRA routinely conducts audits at random, and if you were audited in the previous year, you may be flagged for a follow-up audit," says Stone.
References & Resources
- Byrd & Chen: Canadian Tax Principles – 2013 Professional Edition
- Robert Stone; Mr. Taxes.ca Inc; Canada
- Canada Revenue Agency: Questions and Answers About Child Care Expenses
- Canada Revenue Agency: Form T778, Child Care Expenses Deduction
- Canada Revenue Agency: Line 214: Child Care Expenses
- Canada Revenue Agency: Line 214 - What Are Child Care Expenses?
- Canada Revenue Agency: Line 214 - Who Can Claim Child Care Expenses?
- Canada Revenue Agency: Line 214 – What Payments Can You Claim?
- Canada Revenue Agency: Line 214 – What Payments You Cannot Claim?