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Child care expenses can represent significant amounts in your budget. Fortunately, you can deduct part of these costs.

A matter of income

If you have dependent children under the age of 16 for whom you pay child care expenses, you may be able to claim this deduction at the federal level.

  • The amount of the deduction will be determined by the lesser of the following amounts: the fees paid, 2/3 of earned income or a maximum of $8,000 for children under the age of 7, and $5,000 for children from 7 to 16 years old.
  • A person whose compensation is paid exclusively in the form of dividends will not be able to claim this deduction, because dividends are not part of earned income.
  • The parent with the lower income can claim this amount.

An interesting update!

The elimination of the additional contribution for subsidized child care services, announced by the government of Quebec in its economic update of November 7, 2019, could save you money.

  • Before it was eliminated, a maximum additional contribution of $13.20 per day could be required, depending on your income.
  • Retroactive to January 1, 2019, all parents will pay a rate of $8.25 per day, regardless of their income. This represents a maximum savings of $3,614 per child, and $5,421 for two or more children.
  • If you are an employee and you have requested an adjustment of your source deductions, this amount will either be refunded to you, or it will be used to reduce your tax bill.

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Other tax measures…

Find more information about them in the tax deduction checklist.

Contact your advisor, who can provide you with more details and even set up personalized tax strategies to meet your more complex needs.

Kahina Benbarkat, F. Plan.
Financial Planning Analyst
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