Ah, summer! The best time of the year for every school-aged child, but one of the most challenging (and expensive) for many parents. As a parent, you’ll probably find yourself looking for activities to keep your kids busy. Here’s a look at all the childcare deductions you can take advantage of this summer season.
Any fees paid for a provider that looks after your child can be considered an eligible childcare expense, from licensed daycare facilities and nursery schools to in-home care. If you are paying an organization, such as a daycare center, 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. These receipts can be in either your name or your spouse/common-law partner’s name, regardless of who claims 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. 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.
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. Also, if your child attends an overnight camp or boarding school, you may not be able to claim the entire expense, due to the expense caps which ranges between $125 and $275 per week.
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. 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.