Annual child care expense amount

Tax Topics
1

According to S63(3) of the ITA the annual child care expense amount is:

  • $8,000, if the child is under 7 years of age at the end of the year

A taxpayer and her separated husband each paid 50% of the childcare expenses for their child who is under 7 as of December 31, 2022. They spent a combined $13,000 in childcare expenses in 2022 (the childcare expenses were incurred to allow the parents to work).

Does each parent claim $4,000.00 (even though they each paid $6,500) for the child care expenses which would total to the $8,000.00 limit for the child?

Or does each taxpayer have the ability to claim up to $8,000 in childcare expenses because they are legally separated?

2

Separated parties who share custody both have a potential claim for child care expenses incurred by each of them in respect of the same children.

The way subsection 63(3) is worded each parent would be able to claim up to the maximum deduction; provided they make the payment for child care while the children are in their care and to enable that parent to work or attend school.

Clauses 1.33 through 1.36 of Tax Folio S1-F3-C1 provide some good information on child care expenses in a joint custody situation.

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3

The parents are separated and the child spends most of their time with the mother (taxpayer).
I believe it is a joint custody arrangement - the father pays child support.
The mother incurs childcare expenses for the purpose of earning employment income.

Does this mean the mother can claim the full $6,500.00 she paid?

4

I believe she would be able to claim the $6,500

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