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Can I claim child care payments made while temporarily unemployed or laid off?

CERB, CESB, CRB, CRSB, and CRCB aren't considered “earned income” for the purposes of the child care expenses deduction.

If you received any of these benefits while being temporarily unemployed or laid off, you aren't eligible to claim the child care expenses deduction for tax year 2020.

According to the CRA, the following is considered earned income:

  • Employment income (including tips, gratuities, and the nontaxable part of an emergency volunteer allowance)
  • Net self-employment income, either alone or as an active partner (excluding losses)
  • The taxable part of scholarships, bursaries, fellowships and similar awards, and net research grants
  • Any earnings supplement received under a project sponsored by the Government of Canada to encourage employment (such as the Youth Opportunities Employment Support Program) or sponsored under Part II of the Employment Insurance Act, or any similar program
  • Disability benefits received from the Canada Pension Plan or the Québec Pension Plan
  • Amounts received under the Apprenticeship Incentive Grant program and the Apprenticeship Completion Grant program, administered by Employment and Social Development Canada

You may claim the child care expenses deduction that's the lesser of the following three amounts:

  • The total of $8,000 for each child who's younger than 7 at the end of the year, and $5,000 for each child between 7 and 16 years of age during the year. If the child is eligible for the disability tax credit, the deduction limit is $11,000 with no age requirement
  • Child care expenses paid for services provided in 2020
  • The total deduction (for all children) can't exceed two-thirds of your earned income

If you were a resident of Québec, you can also claim the basic contribution you paid directly to the subsidized child care service provider. If applicable, the Additional Contribution for Subsidized Educational Childcare is also available and calculated on Revenu Québec’s Schedule 1.

Investment income such as dividends and interest, royalty payments received from work that took place before the period for which a person applied for CERB during that specific benefit period, funding received through disability benefits, pensions, student loans, and bursaries don't count as earned income.

However, any amounts received as part of Québec's Employment Insurance program, similar benefits paid under the Québec Parental Insurance Plan, and artists’ royalties are considered self-employment income and should be taken into account in your income calculation. 

No. According to the CRA, for child care expense purposes, any costs incurred in a particular year can't be carried forward and deducted in a later tax year.

Related information

Where do I enter T4, T5, and other T-slips?

What tax slips can I download through the CRA's Auto-fill My Return service?

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