Are childcare expenses tax deductible in Ontario? What parents need to know during tax season

If you’re a working parent, you’ve probably wondered “are childcare expenses tax deductible?” and if so…”how much can I claim?”

Childcare is likely one of your biggest monthly expenses, and the good news is: childcare costs are tax deductible in Ontario!

Here’s a simple breakdown of what you need to know so you don’t miss out on savings this tax season.

Childcare expenses are tax deductible

If you pay for childcare so you can work, run a business, attend school, or conduct research, those expenses can be claimed on your income tax return.

This includes care provided by:

  • Licensed daycare centres
  • Licensed home daycares
  • Unlicensed home daycares
  • Babysitters or nannies

If the care allows you to earn income, it generally qualifies.

How much can you claim?

Working parents can claim up to $8,000 per year for each child (amounts vary based on the child’s age and circumstances, but this is the maximum for children under the age of seven).

If you have more than one child, the claim applies per child, which can make a meaningful difference at tax time.

Licensed and unlicensed providers both qualify

Many parents wonder if care from an unlicensed provider is eligible. The answer is yes.

Both licensed and unlicensed childcare providers:

  • Must report their income
  • Are required to provide you with a receipt for the care you paid for

This is especially helpful for families using home daycare, part-time care, or flexible arrangements.

What receipts do you need?

To claim childcare expenses, you’ll need documentation showing:

  • The provider’s name
  • Contact information (and SIN or business number if applicable)
  • The total amount paid for the year

In most cases, a formal receipt is enough. If your provider doesn’t issue formal receipts, a signed letter that includes their contact details and the total amount you paid can also be accepted.

Keep these records with your tax documents in case the Canada Revenue Agency (CRA) asks for verification.

A helpful reminder for parents

Childcare is an investment that helps families work, grow their careers, and manage daily life. Claiming eligible expenses ensures you’re receiving the financial support available to you.

If you’re using a home daycare provider you found through your community or through Her Yes Club, be sure to request your annual receipt before filing.

The bottom line

If you pay for childcare so you can work, don’t forget to claim it.
You could be eligible to deduct thousands of dollars per child and reduce your overall tax bill.

And as always, if your situation is complex, it’s a good idea to confirm details with a qualified tax professional.

Happy filing and here’s to making parenting (and tax season) a little easier.

Similar Posts