Tax rules, thresholds and administrative procedures can change. Confirm current official requirements and obtain advice for material transactions or unusual facts.
The expense must enable an eligible activity
Childcare expenses generally need to be incurred so a supporting person can work, carry on a business, attend school or perform qualifying research. Babysitting for a social event is not treated the same way.
Who claims it
The lower-income supporting person normally claims the deduction unless a specific exception applies, such as certain school, disability, separation or confinement situations. A couple cannot simply choose the higher-income spouse because the tax saving looks larger.
Example
Sara earns $46,000 and Dev earns $105,000. They pay $14,000 to a licensed daycare. Sara normally claims the eligible amount, subject to the annual child and earned-income limits.
If Sara attends full-time school for part of the year, the exception and weekly limits should be reviewed rather than assuming Dev can claim all costs.
Eligible providers and receipts
The provider may be a daycare, camp, boarding school or individual, depending on the circumstances. Receipts should show the provider's name, identifying information, child, period and amount. Payments to certain related persons do not qualify.
Limits
The deduction is limited by the amount paid, annual limits based on the child's circumstances, a percentage of earned income and other rules. Camp or boarding-school costs may have weekly limits.
Practical preparation
Maintain a calendar of care periods and the parent's work or school period. Reconcile subsidies and reimbursements. Obtain receipts before the provider becomes difficult to contact.
This article provides general Canadian tax information and is not a substitute for tax, legal, financial or investment advice based on complete circumstances.