Childcare and Tax Credits

Do you have children living with you? Beyond the joy and the fingerprint smudges, they can also provide you with some tax credits if you have had to pay a daycare, day nursery schools, caregivers providing child care services, day camps and day sports schools, boarding schools, overnight sports schools or camps where the room and board is involved.
​
Keeping receipts is always necessary when you would like to include it into your tax return. We have encountered situations where the caregiver does not provide tax receipts to parents which means parents cannot use the child care expenses as part of their tax return.

There are different amounts that CRA allows for children of different ages and for children with or without a disability. For example, an amount of $8,000 per child can be claimed a child six and younger as opposed to $5,000 for children seven or over and $11,000 for children with disabilities.
Generally, the rule is for the parent with the lower income to claim the credit but there are some exceptions. The higher income earner may claim the credit if the lower income spouse was enrolled in an educational program, was unable to care for the children due to a physical or mental impairment, was in prison or there was a breakdown in your relationship.

If there is a shared custody, the parents can form an agreement to share the credit. However, if one parent is in primary care of the child or children, then they will receive the credit. If you are new to your shared parenting arrangement, Form RC66 should be submitted to CRA to apply to share the credit. If one of the parents enters into a relationship with a person who is not the parent of the child but has the lower income, they may be the eligible person to claim the childcare credit in that household.

Also important to note; child support payments cannot be used for the childcare credit.

Do you have more questions? We would love to help. Contact Us.