fbpx
Contact us for all your accounting and business valuations needs: (403) 457-4477| info@quadrantaccounting.ca

What every parent needs to know about deducting child-care expenses come tax time

If you need to pay for childcare in order to work or go to school, you can deduct what you pay for child care provided you meet certain conditions. Deductions can range from $5,000-11,000 per child and must be claimed by the parent with the lower income earned in the past year and is limited to two thirds of the lower-income spouse’s “earned income.”

Key Takeaways:

  • The expense must be specifically incurred to allow the parent to work (or go to school). An exception was recently made to the work and school rule for when a child is disabled, and in this case, you can deduct babysitting costs to be able to perform weekend tasks allowing you to work during the week.
  • The child-care expense deduction is limited to $8,000 annually for a child under the age of seven, $5,000 for other eligible children aged seven to 16, and $11,000 for a child who qualifies for the disability tax credit.
  • Child-care expenses incurred does not need to be paid for each eligible child. You can claim based on the ages of your kids and the respective limits.

“If you spend money on child care to enable you to work, carry on a business, or to attend school, you may be able to get a tax deduction on your return for the cost of child-care expenses.”

Read more: https://business.financialpost.com/personal-finance/taxes/what-every-parent-needs-to-know-about-deducting-child-care-expenses-come-tax-time

By |2020-02-28T13:14:04-07:00March 17th, 2020|Commentary|0 Comments

Leave A Comment