Do I get a child care expense deduction? What are eligible child care expenses and how are they deducted?
Child care expenses are only deductible against employment income and can only be claimed by the lower-income spouse.
Both spouses need to have earned wages (employment income) with deductions such as CPP, EI and income tax to be able to claim the child care expenses. If you are earning dividends, your child care expenses will not be deductible.
You can claim this credit if you are working part-time. However, both spouses have to be working. If one spouse is without income, you cannot claim the child care expense because there is no income to apply the deduction to. There are very rare circumstances where the higher-income earner can claim child care expenses.
There is a maximum limit per child care expense to be claimed based on age.
- If the child is 6 years or younger, the maximum you can claim is $8,000.
- If the child is 7 years or older up to 15 years, the maximum you can claim is $5,000.
If you are a single parent, you can claim this if you are working full-time.
If you are on maternity leave, you cannot claim this tax credit for the period while you are not working full-time.
For information on what is not an allowable deduction, please visit the CRA's website.