Do you know who can claim child care expenses? It turns out. It’s not just the parents! Grandparents, aunts, uncles, and others can also claim child care expenses. Apparently, it can be a great way to save money on your taxes.
However, the rules for claiming child care expenses can be confusing, but we’re here to help. Keep reading to learn more about claiming child care expenses and how you can take advantage of this tax deduction.
What is the Child Care Expenses Deduction?
The child care expenses deduction is a tax deduction that allows parents to deduct certain child care expenses from their taxes. This deduction can reduce the amount of taxes you owe or increase your tax refund.
Who Can Claim Child Care Expenses on Taxes in Canada?
The short answer is any relative who provides care for a child under the age of 13 so that the parents can work.
- Great aunts and uncles.
- Family and friends.
- Daycare centers.
The parents must provide the caregiver with a signed Form T778, Child Care Expenses Deduction Worksheet, for the caregiver to claim the expenses.
The parent must fill out the form and include the caregiver’s name, address, and Social Insurance Number (SIN).
It’s important to note that only one parent can sign the form. If both parents are claiming child care expenses on taxes 2022, each parent must fill out their own Form T778.
Usually, a person with a higher net income should sign the form.
Rules and Requirements for Claiming Child Care Expenses Canada?
A few rules and requirements must be met to claim child care expenses as follows:
- You and your partner filed as a married couple.
- You have lived with your partner for at least 6 months to claim common law.
- The care must have been provided so that you could work or attend school full-time.
- If you and your spouse are married or living together, you must have received a salary. However, one of the spouses may be unable to work for at least five months of the year due to illness or school. Then, the other spouse can claim the expenses. They must pay 250$ per week for one child, 500$ per week for two children, and 750$ per week for three or more children.
- You cannot claim expenses if you already receive government assistance for child care, such as the Child Care Subsidy.
Types of Expenses
Two main types of expenses that can be claimed are:
- Daycare expenses
- Babysitting expenses
Daycare expenses include fees paid to a daycare center or a licensed home daycare provider. These expenses can be deducted whether you use formal or informal care.
To claim daycare expenses, you will need a receipt from the daycare provider showing the amount paid and the period of care.
The receipt should also include the name and address of the provider and their business number or Social Insurance Number (SIN).
Babysitting expenses can be deducted for any care provided by an individual unrelated to the child. It includes babysitters, nannies, and Au Pairs.
It’s important to note that you can only claim expenses for babysitting if the care was provided in your home. If the care was provided in the caregiver’s home, you could not claim these expenses.
How Much Can You Claim?
- You can claim up to $8,000 per year for each child under the age of 7.
- You can claim up to $5,000 per year for each child aged 7 to 16.
- There is no limit on the amount you can claim for a child with a disability.
Claiming Child Care Expenses while on Maternity Leave
If you are claiming child care expenses while on maternity leave, you can only claim expenses for the period before your baby is born. For example, if your baby is born on June 1st, you can only claim expenses for the period up to and including May 31st.
Claiming Child Care Expenses When Separated or Divorced
If you are separated or divorced, you can only claim child care expenses if you have sole custody of the child. If you share custody, the parent who pays for the majority of the childcare expenses can claim them.
What are the Benefits of Claiming Child Care Expenses on Taxes 2022?
There are a few benefits to claiming child care expenses on taxes.
Firstly, it can help reduce your overall tax bill. Any expenses that you claim will be deducted from your taxable income, which can save you money come tax time.
Secondly, it can help you afford quality child care. By claiming these expenses on your taxes, you can receive some financial assistance to help cover the cost of child care. This can allow you to choose a higher-quality care option for your child.
Finally, it can help you provide for your family while still being able to work or attend school. By claiming child care expenses CRA, you can receive some financial assistance to help offset the cost of child care. This can allow you to provide better.
The bottom line is that you can claim child care expenses on your taxes if you meet specific criteria. These expenses can help reduce your overall tax bill and help you afford quality child care for your child.
Furthermore, submitting these claims might help you support your family while still working or in school. If you think you may be eligible to claim child care expenses, speak with your accountant or tax professional.
Here, we will answer some of the frequently asked questions related to the topic.
Can I Claim Child Care Expenses Without Claiming the Child?
No, you cannot claim child care expenses without claiming the child. The expenses must be related to the care of a dependent child to be eligible for a deduction or credit.
What Happens if I Don’t Claim Child Care Expenses?
If you don’t claim child care expenses, you will not receive any tax benefits for those expenses. Additionally, you may be audited by the CRA if they believe you should have claimed the costs but did not.
When are Child Care Expenses Paid?
Child care expenses are typically paid when the services are rendered. However, some providers may allow you to pay in advance or at the end of the month.