Who this is for
Working parents paying for daycare, a nanny, before-and-after-school care, day camps or overnight camps. It explains the limits in the Income Tax Act and the CRA’s rules on who claims and what a receipt must show.
The five rules
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A limit per child, by age and status. $8,000 for each child under 7 at the end of the year. $5,000 for each other child who was under 16 at any time in the year. $11,000 for a child who qualifies for the disability tax credit, at any age. These are annual totals, not per provider.
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Two-thirds of earned income. The deduction cannot exceed two-thirds of the claiming parent’s earned income for the year. Earned income means employment and business income, not investment income or benefits. A parent on leave with little earned income may be able to claim very little.
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The lower-income parent claims. If you have a spouse or partner, the one with the lower net income must claim, even with zero income. The higher-income parent can claim only while the other was in a full-time or part-time educational program. The same applies if the other was unable to care for the children because of an infirmity or confined to prison. It also applies during a separation of at least 90 days. Those claims have weekly caps.
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Receipts must name the provider, and an individual’s SIN. A receipt from a daycare shows the business name. A receipt from a person, such as a nanny or neighbour, must show their Social Insurance Number. Without it, the CRA can refuse the claim. Keep receipts for six years; you do not file them, but the CRA asks for them often.
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Overnight camps and boarding schools are capped weekly. The claim for those is limited per week of attendance, at one-fortieth of the annual amount. That is $200 for a child under 7 and $125 for other children. It is $275 for a child eligible for the disability tax credit. Day camps use the ordinary limits.
What does not qualify
Medical or hospital care, clothing, transportation, education costs such as tuition, and recreational activities whose main purpose is not child care. Payments to the child’s parent, or to a relative under 18, do not qualify either.
How the pieces connect
The deduction lowers net income, and net income decides the Canada child benefit, the BC family benefit and several credits for the following July. So a correct child-care claim can raise next year’s benefits as well as cut this year’s tax.
One thing many people do not realize
The parent with the lower net income has to claim, even if the higher earner paid every bill. If the lower-income parent earned nothing, the deduction is usually nil, because it is capped at two-thirds of the claiming parent’s earned income. The higher earner can claim only in specific situations. One example is the other parent being in school full time. Another is the other parent being unable to care for the children for medical reasons.
What to prepare
- Receipts for every provider: name, address, amount, period, and SIN if an individual
- Both parents’ income details
- Dates of any school program, medical situation or separation that would let the higher-income parent claim
- For camps, the number of weeks attended
When professional help may make sense
Parents who separated during the year, or a child with a disability. A parent who returned to school. A nanny paid in cash without a receipt. A nanny who is your employee also means payroll obligations.
How Rex Tax may be able to help
We decide who should claim, apply the three limits, check each receipt, and set up payroll if you employ a caregiver directly.
Official sources
- Income Tax Act, section 63 (child care expenses)
- Canada Revenue Agency: Line 21400, who can claim child care expenses
- Canada Revenue Agency: Line 21400, how to claim child care expenses
This guide is general information, not advice about your situation. It reflects the rules for the 2026 tax year. It has not yet been reviewed by a practitioner. The information was checked against the official sources listed above on the date shown. Rules change. Check the official sources above or ask us. How we prepare these guides.