Child Care Expenses

Eligible child care expenses may be deducted from taxable income if they meet certain criteria. Child Care expenses are expenses incurred in the tax year for child care services rendered by an eligible child care services provider in the taxation year, for any eligible families with children 16 and under. These services were provided to enable families, or the person supporting the child:

To earn income from employment

To carry on a business either alone, or as a partner actively engaged in the business

To carry on research, or any similar work, for which the taxpayer or supporting person received a grant.

Child care expenses can not be carried forward to future years and should be claimed in the year they were incurred.

In the case of married individuals, child care expenses must be claimed by the spouse with the lower income in order to decrease their tax payable, or reduce the tax payable to zero.

Watch the video below to learn more about how to report Child Care Expenses using TaxTron Web:

Eligible child(ren) who live with and are in custody of the claimant, should fall into one of the following categories:

A child of the taxpayer and spouse

A child under 16 years at some point during the year

A child who was dependant on the taxpayer due to disability, for whom there is a signed form; T2201 Disability Tax Credit Certificate

A child’s net income must not exceed the basic personal amount.

An eligible child care service provider may be one of the following:

A day nursery school or day-care centre

A day camp or day sports school

A boarding school or camp (including a sports school where lodging is involved)

An educational institution that provides child care services. When an educational institution offers child care as well as an educational program, only the portion of the fees paid to the institution relating to child care (i.e., supervision before and after classes or during the lunch period) may qualify as child care expenses. However, when the payment made is for a child under the compulsory school age, the services being provided are generally considered child care rather than education unless the facts indicate otherwise.

If the child care expenses are provided by an individual, the individual must:

Be at least 18 years of age

Have social insurance number for taxation purposes

Resident of Canada

Child care expenses are not deductible when payments are made to:

A father/mother of the child or a supporting person

A person for whom the taxpayer or another supporting person claimed an amount on line 30425, 30400 or 30450 or 30500 of Part A Federal non-refundable tax credits

Payments made to a person under 18 who is related to the taxpayer or supporting person.

The child care service provider/individual who received the payment are required to provide the claimant with a receipt which contains the following minimum information:

Name, address and phone number

Name of the child

Duration of child care services provided

Amounts paid

If the child care service provider is an individual, the receipt should contain the following minimum information:

The name, address and phone number of the individual

Social insurance number

Name of the child

Duration of child care services provided

Amounts paid

For further information or if you need to prepare a will, please visit the nearest Softron office or contact Softron at:

Telephone: 1-877-SOFTRON, Website: www.softrontax.com