Claim More for Your Child Care Expenses

Post-tax season blues? Not sure if you claimed all the deductions and credits you were entitled to? You’re probably not alone. Many people miss lucrative provisions when filing, but you can request an adjustment to your filed return. One of the most frequently missed deductions for families is the child care expense claim.

Parents who claim child care expenses will be happy to know they can claim qualifying expenditures as a deduction. Also, those claims could, in fact, increase the tax-free Canada Child Benefit. That’s because family net income will be reduced with the claim.

How much you can claim will depend on the age of your children, your income and how much you actually spent. For children under the age of seven, the maximum is $8,000. For those aged seven to 16, and for those in that age group who are infirm, the maximum is $5,000. For those who are severely disabled and eligible for the Disability Tax Credit, the maximum is $11,000. However, these limits are applied on a family basis, not on a child-by-child basis. This means you can make a claim over the limit for one child, provided that the claim for the other child is under the limit.

Child Care Expenses are deducted from the income of the lower-income spouse when the expenses are incurred to earn employment or business income, perform research or pursue an education. The maximum claim is limited to two-thirds of that earned income. Consult Form T778 for the exact eligible amounts.

Evelyn Jacks is President of Knowledge Bureau, Canada’s leading educator in the tax and financial services, and author of 52 books on family tax preparation and planning.

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