6 things to know about childcare expenses.
April 9, 2021
With all of the love and joy that kids bring into our lives, they can also bring more expenses. Luckily, the Canada Revenue Agency (CRA) and Revenu Québec recognize this and make 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. Services you can claim.
There are many types of childcare providers that your family might use. If you needed childcare to work, attend school, or if you’re a Québec resident, to search for a job, you can claim the cost of the following services:
- Childcare services provided by caregivers (including babysitters and nannies);
- Nursery schools and daycare centres;
- Childcare services provided by educational institutions (only the part of your fees related to childcare can be claimed);
- Day camps and day sports schools where the primary goal of the camp is to care for children (an institution offering a sports study program is not a sports school); or
- Boarding schools (excluding the amount relating to education), overnight sports schools, or camps where accommodation is involved.
This isn’t a complete list. For example, you can also claim the cost of advertising expenses or placement agency fees paid to hire a nanny. For more information on which expenses you can claim, visit the CRA website, and if you’re a resident of Québec, the Revenu Québec website.
2. Get your supporting documents together.
The first step in making a proper claim is getting a receipt for your childcare expenses from your childcare provider. Every receipt needs to be made out to the person who paid for the childcare expenses. If the childcare services were provided by an individual, the receipt should also show the provider’s SIN (Social Insurance Number). You don't have to submit your receipts if you're filing electronically, but you do need to keep them in case the CRA or Revenu Québec asks to see them.
3. Who makes the claim?
The spouse who earns less income will need to claim the childcare expenses on their federal return. Even if the lower income earner doesn’t need the deductions, the expenses usually can’t be transferred, with a few exceptions.
If the spouse who earns less is in school, in the hospital, or if they’re confined to a prison or similar institution, childcare expenses can be claimed for that period by the spouse who earns a higher income, or both spouses can split the expenses on their returns.
If you’re a single parent, you’ll claim all the childcare expenses you paid for while your child was living with you.
If you’re a Québec resident, either spouse will be able to claim the childcare expenses on your provincial return.
4. All in the family.
If you pay your parent (say your mother or father-in-law) to look after your children, you can claim the amount you pay them. Keep in mind they’ll have to provide you with a receipt that includes their SIN, and report the money you’ve paid them as income on their return.
However, if your child was looked after by their own parent (for example, their own dad) or their parent’s spouse (for example, their stepdad), you won’t be able to claim the amount you pay them.
5. Some minors don’t count.
Your childcare provider can’t be younger than 18 and related to you by blood, marriage or common-law partnership, or adoption. For example, your brother, sister, brother-in-law, sister-in-law are related to you; your niece, nephew, uncle, and aunt aren’t. If you pay your 12-year-old to look after their brothers or sisters, this doesn’t count as an eligible childcare expense.
6. Claiming childcare expenses during COVID-19.
As a temporary measure for 2020 and 2021 returns only, all Employment Insurance (EI) benefits and COVID-19 emergency benefits, such as the Canada Emergency Relief Benefit (CERB), are considered “earned income.” This means if you received EI benefits or any of the COVID-19 emergency benefits, you can claim your childcare expenses on your 2020 and 2021 returns, even if you didn’t work or attend school during the year. This includes EI benefits you might have received while on maternity leave. The amount of benefits you received will determine how much you can claim for your childcare expenses.
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