In Canada, childcare expenses, including daycare fees, can help parents reduce their taxes. This article briefly explains how these expenses can be used for tax deductions:
Eligible Expenses
Eligible expenses include fees for:
- Kindergarten
- Daycare
- Babysitters
- After-school care
- Summer camps
Deduction Limits:
- Children under 6 years old: Up to $8,000 per year
- Children aged 6-16: Up to $5,000 per year
- Children with disabilities: Up to $11,000 per year
Who Can Claim?
Both parents must be working or studying: At least one parent must have a T2202 Tuition and Enrolment Certificate if studying. If one parent is a full-time caregiver at home, neither parent can claim the deduction.
Claimed by the lower-income spouse: Typically, the parent with the lower income must claim the deduction.
How to Claim?
Keep receipts: Ensure you have official receipts from childcare providers (e.g., daycare centers or babysitters).
Fill out Form T778: Enter the amounts into your T1 tax return.
Use tax software: Most tax software or online systems can automatically calculate and apply the deduction.
If you need further assistance, feel free to reach out for help!
