Child Care Deduction entered but not showing in summary making us owe money!

My spouse has the lower income and unemployment insurance was his only income for the past tax year.  The program is not allowing him to claim the child care expenses as it says his earned income is 0 (but my income is higher so I cannot claim it either).  Is this correct that employment insurance income does not allow you to claim a child care deduction?   I found information online from Intuit that says it is earned income but for some reason the program is saying otherwise.   

fuzzy
New Member

Credits and deductions

Employment insurance income is considered a part of Net income but is not considered earned income.  If this is your spouse's only source of income and he has the lower net income, then child care expenses are generally not deductible by either of you.  Exceptions to this would be if he were a student or has been certified by a medical practitioner of being incapable of caring for a child.  For more info please see http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/214/wh/menu-eng.html  and Open Form T778.  The definition of earned income for purposes of Child care expenses is on Page 2

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Credits and deductions

The below is copied directly from the Turbo Tax information section, this is why I am confused:

Child Care Expense Deduction
Child care expenses are usually claimed by the spouse with the lowest net income, or by the single parent with whom the children in care reside. Benefits received from the EI program are considered earned income for tax purposes, so EI benefits have no effect on the claim for child care expenses . Since EI benefits don't completely replace employment earnings, the reduction of earned income may affect the earning relationship between spouses, which also changes which spouse should claim child care expenses. Child care expenses are reported on form T778, with the allowable deduction transferred to line 214 of your federal tax return.

Credits and deductions

Thank you so much, that makes it much clearer 🙂
fuzzy
New Member

Credits and deductions

I would go with the definitions of earned income on  CRA website  http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s1/f3/s1-f3-c1-eng.html#N10766 and their Form T778