Child Care Expenses

You might be able to deduct your child care expenses if they were incurred to enable you or a supporting person to earn employment or business income, attend a designated educational institution or a secondary school, or engage in grant research. Attendance at a designated educational institution or secondary school means attendance of at least one course that is at least three weeks long, for at least 10 hours per week (full-time program) or 12 hours per month (part-time program).

A supporting person includes your spouse, the parent of the child, or the person who claimed the child as a dependent. The supporting person must have lived with you at any time in the taxation year as well as at any time in the first 60 days of the following taxation year. An eligible child is defined as a child of the taxpayer or the taxpayer’s spouse, or a child dependent on the taxpayer or the taxpayer’s spouse and whose income for the year does not exceed the basic personal amount for the year. The child has to be under 16 years of age at some time in the year. However, the age limit does not apply if, during the year, the child is dependent on the taxpayer or the taxpayer’s spouse and has a mental or physical infirmity.

The maximum deduction is $11,000 for each child qualifying for the disability tax credit, $8,000 for each other child aged six or under at the end of the year, and $5,000 for each other child aged seven to fifteen at any time in the year and for a child with a mental or physical impairment born in 1998 or earlier for whom the disability amount cannot be claimed. The maximum total deduction may not exceed two-thirds of your earned income and the actual amount paid in the year for child care. The deduction can be claimed only by the lower income person unless the lower income spouse attends secondary or post-secondary school, is mentally or physically infirm, or for a period of at least two weeks was in a prison, hospital, asylum or other similar institution.

Child care expenses can include day care, nursery school, day sports camp, lodging at a boarding school or camp, and certain payments to babysitters.

Complete Form T778, Calculation of Child Care Expenses Deduction, and file it with your income tax return.

If you would like more information about claiming child care expenses, seek the advice of a Chartered Professional Accountant.