Summer is the best time of the year for most school-aged kids, but it’s also one of the most challenging (and expensive) times for parents. Unless you’re sending your child(ren) off to sleepover camp the day after school ends, you are likely looking for activities to keep them busy. Thankfully, the Canada Revenue Agency (CRA) has some tax breaks available that may help take the sting out of summer time bills.
Any fees paid for a provider that looks after your child can be considered an eligible childcare expense, including:
- licensed daycare facilities
- nursery schools
- in-home care
If you are paying an organization, such as a daycare centre, make sure your receipt contains the name and address, as well as information about the services. For individual providers, such as day homes, your receipt must also contain the Social Insurance Number of the individual running the service. These receipts can be in either your name or your spouse/common-law partner’s name. The name on the receipt does not impact the eligibility for either partner to claim the expense at tax time.
There’s no better way for children to enjoy the outdoors, learn new things, and sharpen their skills in a sport or hobby, than being outdoors at a summer camp. What’s important to keep in mind is that the summer camp’s primary goal should be childcare – only then can the expense be considered a deduction. Additionally, the age of the child usually determines whether a sports camp qualifies.
There’s no age limit if the child was dependent on the taxpayer or spouse/common-law partner and has a mental or physical infirmity. If it matters, be sure to ask upfront. Camp owners who are qualified should be able to quickly and easily answer all of your questions and should also be able to provide a receipt which breaks down the percentage of time spent on child care so that the proper amount can be claimed.
For example, a 5-year-old who attends a hockey day camp would require constant supervision and care. However, if your 15-year-old is invited to attend a hockey day camp that is goal-oriented and uses sophisticated training methods, this expense would not qualify as a childcare expense.
Many parents opt to have a family member assume childcare duties for the summer. Although this option may work better for your situation, money paid to certain relatives won’t deliver a tax deduction. The CRA excludes a number of relatives as eligible childcare providers for tax purposes depending on the age of the provider and if you claimed certain credits for this provider.
All-in-all, be sure to know in advance what the tax implications are of sending your child(ren) to camp, or other summer programs is, so that you can take full advantage of the credits available at tax time.