Child Care Expense Deduction
Child care expenses are tax-deductible when you (or your spouse) pay for child care to work, run a business, attend school, or conduct research.
2026 Deduction Limits
| Child’s Age/Status | Annual Limit | Weekly Limit (camps) |
|---|---|---|
| Under 7 years | $8,000 | $200 |
| Ages 7-16 | $5,000 | $125 |
| Disabled (any age with DTC) | $11,000 | $275 |
These are maximum limits. You can only claim actual amounts paid, up to the limit.
Who Can Claim
General Rule
The lower-income spouse must claim the deduction. This rule exists because the deduction provides a larger tax benefit to lower-income earners.
Exceptions
The higher-income spouse can claim if the lower-income spouse is:
| Situation | Higher-Income Can Claim |
|---|---|
| Full-time student | For each week/month in school |
| Disabled (cannot care for children) | Full amount |
| In prison (90+ days) | Full amount |
| Separated (90+ days) | Full amount |
| Living apart for work/school | For that period |
Single Parents
Single parents claim all eligible expenses on their own return.
Qualifying Expenses
Eligible Child Care
| Expense | Deductible |
|---|---|
| Licensed daycare | ✓ Yes |
| Unlicensed daycare | ✓ Yes |
| Nanny or babysitter | ✓ Yes |
| Before/after school programs | ✓ Yes |
| Day camps | ✓ Yes (weekly limit) |
| Overnight camps | ✓ Yes (weekly limit) |
| Boarding school (care portion) | ✓ Yes (limit applies) |
| Preschool / nursery school | ✓ Yes |
NOT Eligible
| Expense | Why Not Deductible |
|---|---|
| Medical/hospital care | Not child care |
| Clothing | Not care |
| Transportation | Not care |
| Tuition for education | Not care (some overlap with boarding school) |
| Sports/hobby lessons | Education, not care |
| Payments to spouse/related minors | CRA restriction |
| Payments to parent of the child | CRA restriction |
Calculating Your Deduction
Step 1: Add Up Expenses
Total all qualifying child care payments for the year.
Step 2: Apply Limits
Each child has an individual limit based on age/status.
Step 3: Apply Income Limit
The deduction cannot exceed 2/3 of your earned income.
Example Calculation
Family situation:
- 2 children (ages 3 and 8)
- Total daycare paid: $15,000
- Lower-income spouse earns: $45,000
| Child | Age | Expenses | Limit | Eligible |
|---|---|---|---|---|
| Child 1 | 3 | $10,000 | $8,000 | $8,000 |
| Child 2 | 8 | $5,000 | $5,000 | $5,000 |
| Total | $15,000 | $13,000 | $13,000 |
Income check: 2/3 of $45,000 = $30,000 (not limiting)
Final deduction: $13,000
Tax savings (at 30% marginal rate): $3,900
Receipts Required
You must have receipts showing:
- Caregiver’s name
- Caregiver’s SIN (or business number)
- Amount paid
- Dates of care
Nannies and Babysitters
If you pay an individual directly, you may need to:
- Get their SIN
- Issue a T4 if wages exceed threshold
- Potentially pay employer CPP/EI contributions
Daycare Centers
Licensed daycares typically provide tax receipts by February.
Special Situations
Summer Camps
Day camps and overnight camps qualify, but overnight camps are subject to weekly limits:
| Child | Day Camp | Overnight Camp |
|---|---|---|
| Under 7 | $8,000/year | $200/week |
| Ages 7-16 | $5,000/year | $125/week |
| Disabled | $11,000/year | $275/week |
Students
If you’re a student (full-time or part-time), you can claim for weeks/months in school:
| Attendance | Monthly Limit | Weekly Limit |
|---|---|---|
| Full-time student | Same as annual ÷ 12 | Same as weekly |
| Part-time student | 2/3 of full-time | 2/3 of weekly |
Disabled Children
Children eligible for the Disability Tax Credit qualify for the $11,000 limit regardless of age.
How to Claim
- Complete Form T778 (Child Care Expenses Deduction)
- Enter total on line 21400 of your return
- Keep receipts for 6 years (CRA may request)
Related Tax Benefits
Child care expenses work alongside other family benefits:
| Benefit | What It Does |
|---|---|
| Canada Child Benefit | Monthly payment based on income |
| Child Care Expense Deduction | Reduces taxable income |
| Child amount (non-refundable credit) | $2,499 per child under 18 |
| Disability Tax Credit | Additional credit for disabled children |
Provincial Child Care Programs
Some provinces offer additional support:
| Province | Program |
|---|---|
| Quebec | $10/day subsidized daycare |
| Ontario | CWELCC fee reductions |
| BC | ChildCareBC fee reductions |
| Alberta | Child care subsidy |
These programs reduce your out-of-pocket costs. You can only claim what you actually paid.
Common Questions
Can grandparents be paid for child care?
Yes, if they are not your spouse or a dependent and they provide proper receipts with their SIN.
What if I pay my older child to babysit?
Payments to your own children under 18 cannot be claimed.
Can I claim expenses while on parental leave?
Generally no, as you’re not working or studying. Expenses must be to earn income or attend school.