If you (or your spouse or common-law partner) paid others to take care of your children so that you can work, run a business, or attend school, you might be able to deduct the child care expenses to reduce your taxable income. This is called the child care expense deduction.
There are some conditions and exceptions you need to know about before you claim this deduction:
Age limit: Your child care expenses must be for children who are 15 years of age or younger at some time in the year. Age limit doesn’t apply for children who are mentally or physically infirm and dependent on you.
Residency: Expenses must occur while the child was living with you.
Paying relatives for childcare: Payments made to a child’s parent, or your spouse or common-law partner, are not deductible. Also, payments made to persons under 18 years of age who are related to you by blood, marriage, common-law partnership, or adoption—such as your brother, sister, brother-in-law, sister-in-law, and you or your spouse or common-law partner's children—are also not deductible. This restriction does not apply to nieces, nephews, aunts, and uncles.
Receipt requirement: You need to have a receipt for your expenses. Receipts made to individuals must include their Social Insurance Number (SIN). You don’t have to send in the receipts with your tax return, but the Canada Revenue Agency (CRA) might want to see them at a later date.
Ineligible expenses: Payments must be related to child care only. Here are some examples of payments that wouldn’t be eligible: payments for medical or hospital care, clothing, transportation, education costs such as tuition fees for a regular program or a sports study program, and fees for leisure or recreational activities such as tennis lessons or registration fees for Scouts or Girl Guides.
The cost of meals and tuition can be deducted in the following cases:
- Cost of meals is eligible if it’s included in the cost of child care.
- Fees paid to kindergarten are eligible if the receipt shows that the fees were paid for child care and not for education.
- Payments made to boarding schools, overnight sports schools, or camps are also eligible, even though they include a board and lodging component.
More than one supporting person: In households with both parents, or where there are other people in the same dwelling who support a child, the supporting person with the lowest net income must claim the deduction, regardless of who paid for the expenses. For couples filing their tax return together, TurboTax automatically claims the deduction on the file of the person with the lower net income.
The person with the higher net income can deduct the child care expenses when the person with the lower net income is
- Attending school,
- Unable to take care of the children because of a physical or mental infirmity,
- Confined to a prison, or
- Separated from the person with the higher net income.
For additional details or explanations, view the CRA Income Tax Folio on child care expense deduction.