Yes, childcare costs can come off your taxes in Canada, but as a deduction (line 21400), not a credit: what you paid for care so that you or your spouse could work, run a business, go to school or do research reduces net income. The claim is capped per child, usually has to be made by the spouse with the lower income, and can’t exceed two-thirds of that spouse’s earned income. This page covers the limits, who claims, which kinds of care count (daycare, nannies, camps, preschool), the receipts the CRA expects, and employer-paid childcare. It is part of the guide to Canadian tax deductions and credits; why a deduction is worth more to a higher earner than a credit of the same size is explained in deductions vs credits.
Which children qualify
You can claim childcare expenses for a child who:
- Is under 16 at any point in the tax year, or
- Is under 18 and has a physical or mental infirmity and depends on you, or
- Is your or your spouse’s dependent child of any age if they have an infirmity
Children who are 16 or older with no disability don’t qualify.
Annual deduction limits per child
| Child’s Age/Status | Annual Limit | Weekly Limit (overnight camps, boarding school) |
|---|---|---|
| Under 7 years at December 31 | $8,000 | $200 |
| Ages 7-16 | $5,000 | $125 |
| Eligible for the Disability Tax Credit (any age) | $11,000 | $275 |
| Infirm but not eligible for the DTC | $5,000 | $125 |
These are maximums: you can only claim what you actually paid, up to each child’s limit, and the total can’t exceed two-thirds of the claiming spouse’s earned income. The $11,000 limit depends on the child being approved for the Disability Tax Credit.
The lower-income spouse rule
General rule
The lower-income spouse or common-law partner must claim the deduction, even when the higher earner paid the bills. In a household where one partner has no income, this usually means no deduction at all unless an exception applies.
Exceptions
The higher-income spouse can claim if the lower-income spouse was:
| Situation | Higher-Income Can Claim |
|---|---|
| Full-time or part-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 |
When the exception is schooling, the higher earner’s claim is limited to the weeks or months of study:
| Attendance | Monthly Limit | Weekly Limit |
|---|---|---|
| Full-time student | Annual limit ÷ 12 | The weekly limit |
| Part-time student | 2/3 of full-time | 2/3 of weekly |
Single parents
Single parents claim all eligible expenses on their own return.
What qualifies: daycare, nannies, camps and preschool
Eligible childcare
| Expense | Deductible |
|---|---|
| Licensed daycare | ✓ Yes |
| Unlicensed daycare | ✓ Yes |
| Nanny or babysitter | ✓ Yes (caregiver’s SIN required) |
| Before/after school programs | ✓ Yes, when the main service is care |
| Day camps | ✓ Yes |
| Overnight camps | ✓ Yes (weekly limit) |
| Boarding school (care portion) | ✓ Yes (weekly limit) |
| Preschool / nursery school | ✓ Yes, when care is the main component |
| Sports or arts day programs | ✓ Yes, when care is the main purpose and instruction is secondary |
Summer camps
Day camps count toward the child’s annual limit like any other care. Overnight camps (and boarding schools) are also capped by the weekly limits in the table above: $200 a week for a child under 7, $125 for ages 7 to 16, and $275 for a child eligible for the DTC.
Not eligible
| Expense | Why Not Deductible |
|---|---|
| Medical/hospital care | Not child care |
| Clothing and food | Not care |
| Transportation to and from care | Not care |
| Tuition at a school where education is the main purpose | Education, not care |
| Sports/hobby lessons | Instruction, not care |
| Payments to your spouse, or to your own children under 18 | CRA restriction |
| Payments to the other parent of the child | CRA restriction |
| Costs reimbursed tax-free by an employer | Already paid for you |
Grandparents and other relatives can be paid for care and claimed, as long as they aren’t your spouse or a dependant and they give you receipts with their SIN.
Calculating your deduction
- Add up expenses: total all qualifying childcare payments for the year.
- Apply each child’s limit based on age and disability status.
- Apply the income limit: the deduction can’t exceed 2/3 of the claiming spouse’s earned income.
Example calculation
Family situation:
- 2 children (ages 3 and 8)
- Total daycare paid: $15,000
- The spouse who claims 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 and the caregiver’s SIN
Receipts need to show:
- The caregiver’s or organization’s name
- The caregiver’s SIN (for an individual) or business number (for a daycare, camp or school)
- The child’s name, the dates of care and the amount paid
- For camps: the camp’s name, the dates, and whether it was a day or overnight camp
If you pay a private individual (babysitter, nanny, friend, relative), you must report their SIN on Form T778. The CRA uses it to match the income on the caregiver’s return, and a claim without it may be denied. If the caregiver is your employee, you may also need to issue a T4 and pay employer CPP and EI contributions. Licensed daycares usually issue tax receipts by February. Keep all records for 6 years.
Employer-provided childcare
If your employer pays for daycare on your behalf, directly or as a reimbursement, the value is usually a taxable benefit included in box 40 of your T4. A taxable payment like that can still be claimed on line 21400, so the T4 inclusion and the deduction offset each other. A reimbursement that wasn’t included in your income can’t be claimed. How box 40 benefits work in general is covered in what counts as a taxable benefit.
How to claim
- Complete Form T778 (Child Care Expenses Deduction), child by child
- Apply the per-child limits and the 2/3 of earned income cap
- Enter the total on line 21400 of your return
- Keep receipts for 6 years (the CRA may ask for them)
Related family benefits
The deduction sits alongside other support for families. The Canada Child Benefit amounts are a tax-free monthly payment based on family net income. The federal “child amount” credit was eliminated in 2015 and no longer exists; it shouldn’t be confused with the still-active Canada Caregiver Credit for infirm children under 18.
Subsidized and reduced-fee programs (Quebec’s subsidized daycare, Ontario’s CWELCC fee reductions, ChildCareBC, Alberta’s subsidy) lower what parents pay, and only what you actually paid can be claimed. What daycare costs in each province is compared in how much daycare costs in Canada.
Expenses on parental leave generally can’t be claimed, since the care isn’t needed to work or study during the leave.