If you pay for your child to go to daycare, or for a nanny to look after them while you go to work or school, you may be able to claim child care expenses on your personal income tax return. The deduction is available to children up to the age of 16, and each child must meet CRA’s definition of an “eligible child”. Here are five things to know about claiming child care expenses this tax season:
1. You need to keep your receipts.
In order to support your claim, you’ll need to have support for the expenses you incur. Make sure your child care provider gives you with receipts for these amounts. You’ll want to make sure that the receipts have the following information on them:
- The total amount paid towards child care;
- The start and end dates that the care was provided;
- The SIN # of the child care provider;
- A signature from the child care provider.
As things can get hectic before tax time, consider requesting these receipts on a monthly basis from your day care or child care provider. It is much easier to keep records on a monthly basis rather than scrambling at the end of the year.
Most day care centres are required by the CRA to provide these receipts if requested, but it’s best to get ahead and organize this before the end of the year.
2. Only “Eligible Expenses” Count.
Eligible expenses are generally considered any amounts paid to an eligible child care provider for the purpose of enabling you to go to work or school.
Expenses paid to day care centres, nurseries, boarding school or a nanny are generally considered eligible expenses.
Remember, only the costs associated with childcare are considered eligible expenses. So, if you pay to send your child to boarding school, tuition fees are not considered an eligible expense – only the lodging portion is.
Also, any costs for child care that are reimbursed say, by your employer, are also not considered eligible expenses.
3. Your claim amount depends on the age of your child.
The maximum claimable amount for children aged 0-6 years old by December 31 of the taxation year is $8,000.
The maximum claimable amount for children aged 7-16 years old by December 31 of the taxation year is $5,000.
So, if you have two children, aged 5 and 9, the maximum deduction you can claim is $13,000 ($8,000 for the 5 year old, plus $5,000 for the 9 year old).
However, if your child is mentally or physically infirm and qualify for the disability tax credit, the maximum claim is raised to $11,000 per child.
4. Who gets to make the child care expense claim?
Generally speaking, in a two-person household, the lower income spouse must claim the deduction, even if their income is zero. There are only a few situations where the higher income spouse can claim this amount: if the lower income spouse is in school, jail or the hospital. See this CRA Bulletin for more information on these specific conditions.
Additionally, this deduction cannot be transferred between spouses.
If you’re a single parent, then the full claim goes on your tax return.
5. You can’t claim payments made to Minors.
In other words, you cannot pay your 15 year old to look after their little brothers or sisters. Any expenses paid to relatives under 18 years of age do not qualify for this deduction. Furthermore, you cannot claim any amounts paid to your spouse for looking after your child.
However, if you pay your mother-in-law a fee for looking after your child, you can claim that amount. Make sure she provides you with her SIN number, and claims it as income on her tax return.
Want more information? Here are some CRA resources on claiming Child Care Expenses:
This information is for informational purposes only. As it is impossible to include all situations, circumstances and exceptions, please consult with a qualified professional.