What is child care expense deduction?

Child care expenses are generally considered personal or living expenses. However, some expenses may be tax deductible if they were incurred to allow you or your spouse to earn income from employment or self-employment, to go to school, or to conduct research.

Eligibility

The expenses must be incurred on behalf on an eligible child. And the government has specific rules regarding what types of expenses are deductible.

Which spouse should claim child care expenses?

In typical situation, where the child lives with both parents, the child care expense deduction has to be claimed by the lower-income parent. But in some situations, the deduction can be claimed by the higher-income spouse.

Earned income

Child care expenses can be deductible only against earned income.

Deduction limit

Child care expenses can be expensive. You may not able to claim all expenses you paid. The government places limits on the maximum child care expenses that can be claimed per eligible child. There are further restrictions if the higher income spouse claims the deduction or if the expenses are paid to boarding schools or camps.

What amount can you deduct?

The deductible amount is the least of:

Earned income for purpose of child care expense deduction

Eligible child for purpose of child care expense deduction

What child care expenses are deductible

What is the child care expense deduction limit 

Which spouse should claim child care expense deduction?

Some restriction on deductible child care expense amount?

Child care expense paid to certain individuals is not tax deductible?

Additional information