With all of the love and joy that kids bring into our lives, the reality is they also bring more expenses. Luckily, the Canada Revenue Agency (CRA) recognizes this and makes room on your tax return for some childcare expenses. We’ve broken down how to claim these expenses here, so you can take the guesswork out of your childcare costs.
1.Get your receipts together
The first step in making a proper claim is getting a receipt for your childcare expenses from your childcare provider. They must provide you with their Social Insurance Number (SIN) on the receipt, and without this receipt you can’t make a claim.
2.Who makes the claim
Often, the spouse who earns less must claim the childcare expenses on their tax return. The only situations that allow higher-income earning spouses to claim these expenses are when the lower-income spouse is in school, jail or in the hospital. Otherwise, the childcare expenses have to be claimed by the lower-income spouse. Even if the lower income earner doesn’t need the deductions, the expenses cannot be transferred. If you’re a single parent, you’ll be claiming all of your childcare expenses on your return, or deciding with your child’s other parent who will be making the claim.
3.All in the family
If a parent (say your Mom or father-in-law) is caring for your children, you can claim the amount you pay them. However, they have to provide you with a receipt that includes their SIN, and report the money you’ve paid them as income on their return.
4.Minors don’t count
If you pay your 12-year-old to look after their brothers or sisters, this doesn’t count as an eligible childcare expense.
5.Maternity leave income
Childcare expenses can only be claimed against employment income and other earned income. Say you’re on maternity leave and are the lower income earner in your family. Your maternity leave benefits aren’t considered “earned” income by the CRA. Because this income isn’t “earned” in the same way employment income is, you can’t claim childcare expenses against it.
If your kids are signed up for camps, you can claim the childcare portion of their fees. Make sure you ask for a detailed receipt, as it’s only the childcare portion of the fees that are eligible.
7.Lunch-time supervision at school
If you’re paying to have your child stay at school to eat lunch, the supervision fees are considered an eligible childcare expense, but make sure you aren’t including the cost of food.