Child Care Expenses
Child care costs are not claimed as a non-refundable tax credit, but as a
deduction from income on line 214 of the personal tax return. A non-refundable
tax credit is always at the lowest tax rate (except in Québec), but a reduction
of income would save tax at the taxpayer's marginal tax rate.
In most cases, child care expenses for an eligible child must be claimed by the
parent with the lower net income for tax purposes. If the parents are separated
and share custody, each parent may usually claim a portion of the child care
costs. Where a medical doctor certifies in writing that the lower-income spouse
is incapable of caring for the child due to a physical or mental infirmity, then
the costs may be claimed by the higher income spouse.
An eligible child is a child of you or your spouse or common-law partner, or a
child who was dependent on you or your spouse or common-law partner, and whose
net income (in 2006) was $8,839 or less. The child must have been under 16 years
of age at the beginning of the year, unless the child was mentally or physically
infirm.
Allowable child care expenses are those paid for the care of an eligible child,
to enable the parent to earn employment income, carry on a business, attend an
eligible program at a designated educational institution for at least 3
consecutive weeks, or carry on research or similar work for which a grant has
been received. Some examples of eligible child care expenses include day-care
centres and day nursery schools, some individuals providing child care services,
day camps and day sports schools, educational institutions such as private
schools (the portion of tuition costs relating to child care services), boarding
schools, and overnight sports schools and camps.
Canada Revenue Agency (CRA) form
T778 Child Care Expenses is filed with the tax
return to make a claim for child care costs.
Child Care Services Provided By A Relative
Costs for child care services provided by a person 18 or over who is related to you are eligible as child care expenses, as long as you or another person did not claim a tax credit for that person in the following categories of the personal tax return:
- Line 305 - amount for an eligible dependent
- Line 306 - amount for infirm dependents age 18 or over
- Line 315 - caregiver amount
For more detailed information on child care expenses, see the CRA web page Line 214 Child Care Expenses.