Line 214 Child Care Expenses
Child care costs are not claimed as a non-refundable tax credit, but as a deduction from income on line 214 of the personal tax return. A non-refundable tax credit is always at the lowest tax rate (except in Québec), but a reduction of income would save tax at the taxpayer’s marginal tax rate.
In most cases, child care expenses for an eligible child must be claimed by the parent with the lower net income for tax purposes. If the parents are separated and share custody, each parent may usually claim a portion of the child care costs. Where a medical doctor certifies in writing that the lower-income spouse is incapable of caring for the child due to a physical or mental infirmity, then the costs may be claimed by the higher income spouse.
An eligible child is a child of you or your spouse or common-law partner, or a child who was dependent on you or your spouse or common-law partner, and whose net income in the year was less than or equal to the basic personal amount ($10,822 in 2012, $11,038 in 2013). The child must have been under 16 years of age at the beginning of the year, unless the child was mentally or physically infirm.
Allowable child care expenses are those paid for the care of an eligible child, to enable the parent to earn employment income, carry on a business, attend an eligible program at a designated educational institution for at least 3 consecutive weeks, or carry on research or similar work for which a grant has been received. Some examples of eligible child care expenses include day-care centres and day nursery schools, some individuals providing child care services, day camps and day sports schools, educational institutions such as private schools (the portion of tuition costs relating to child care services), boarding schools, and overnight sports schools and camps.
There are limits on the total amount of child care expenses that can be claimed for each child. There are also limits on the amounts that can be claimed for expenses related to boarding schools or overnight camps.
Basic annual limit for each child for child care expenses
|1.||Age 6 or less at the end of the tax year, for whom the disability amount cannot be claimed||
|2.||Any age, for whom the disability amount can be claimed||
|3.||Age 7 to 16 at the end of the tax year, for whom the disability amount cannot be claimed||
|4.||Over 16 at the end of the tax year, with a mental or physical impairment, for whom the disability amount cannot be claimed||
Maximum weekly claim for certain child care expenses
The maximum that can be claimed for expenses for a stay in a boarding school (other than education costs) or an overnight camp (including an overnight sports school) is:
||$175 per week for a child in line 1 above|
||$250 per week for a child in line 2 above, and|
||$100 per week for a child in lines 3 or 4 above.|
Annual limit for child care expenses based on income
The claim for child care expenses cannot exceed two-thirds of your earned income for the year.
If your costs exceed the allowable limit, a tax credit may be available for some of the costs through the child fitness tax credit. Any eligible fitness costs which qualify as child care costs must first be claimed as child care costs, with the remainder of eligible costs then claimed through the fitness credit.
Provincial Claims for Child Care Costs
Because the child care costs are claimed as a deduction from income, this reduces both federal and provincial taxes payable. In Newfoundland and Labrador, there is a non-refundable child care tax credit in addition to the deduction from income. The tax credit is claimed by the individual who claims the child care costs. The tax credit is calculated by multiplying the child care costs by the lowest personal tax rate.
Costs for child care services provided by a person 18 or over who is related to you are eligible as child care expenses, as long as you or another person did not claim a tax credit for that person in the following categories of the personal tax return:
||line 305 – amount for an eligible dependent|
||line 306 – amount for infirm dependents age 18 or over|
||line 315 – caregiver amount|
For more detailed information on child care expenses, see the CRA web page Line 214 Child Care Expenses.