Childcare Expense Deductions in Canada (2025 Guide)

The childcare expense deduction is a powerful tax break available to Canadian parents and caregivers who pay for child care to earn income, go to school, or conduct research. By claiming eligible childcare costs, you can reduce your taxable income and increase your refund—sometimes by thousands of dollars annually. This in-depth guide explains who can claim, what expenses are eligible, limits, documentation, and advanced tips for maximizing your benefit for 2025.

What’s Covered: Eligibility rules, eligible/ineligible expenses, annual limits, claim process, and compliance tips
Who Can Benefit: Parents, guardians, foster parents, and those with custody of eligible children
Quick Links: Eligibility, Expenses, How to Claim, FAQ

For province-specific childcare credits and supplements, see: Ontario, Quebec, BC

A parent dropping off a child at a Canadian daycare, with caregivers and children in a safe, nurturing environment

Who Can Claim the Childcare Expense Deduction?

Primary Eligibility: You paid someone to look after an eligible child so that you (or your spouse/common-law partner) could:
- Earn income (employment, self-employment, commission)
- Attend school (full- or part-time, qualifying program)
- Conduct grant-funded research (if eligible)
- Look for work (actively seeking employment)
Eligible Children: Generally, your or your spouse’s child, stepchild, or a child in your custody, who was under 16 years of age at some point in the year, or any age if physically/mentally infirm.
Who Must Claim: In two-parent families, the lower net income spouse/partner must generally claim the deduction (exceptions apply for illness, full-time studies, incarceration, or separation).
Divorced/Separated Parents: Only the parent with custody during the time care was provided may claim expenses for that period.

Note: The deduction is not a credit—it directly reduces your taxable income, not just your taxes owing.

What Childcare Expenses Are Eligible?

Daycare Centers & Nurseries: Licensed or unlicensed facilities that provide childcare.
Home-Based Caregivers: Babysitters, nannies, and caregivers providing childcare in your home or theirs. Cannot be the child’s parent or a relative under 18.
Day Camps & Sports Schools: Daytime-only camps (sports, arts, STEM) during school breaks; overnight camps have separate limits.
Boarding Schools & Overnight Camps: Eligible up to a set weekly limit (see below).
Nursery Schools & Montessori Programs: If the main purpose is childcare, not education.
Care for Disabled Children: Specialized care for children of any age who are mentally/physically infirm.
Payments to Relatives: Allowed only if the caregiver is 18 or older and not the child’s parent.

Not Eligible: School tuition (elementary/secondary), fees for lessons (music, sports, tutoring), medical/dental expenses, clothing, transportation, or payments to the child’s parent/guardian.

Annual Deduction Limits (2025)

Per Child (maximum):
- $8,000 for each child under age 7 at year-end
- $5,000 for each child aged 7 to 16 (or older if infirm)
- $11,000 for each child eligible for the Disability Tax Credit (any age)
Overnight Camp/Boarding School: Lesser of actual cost or:
- $200 per week (under 7)
- $125 per week (7-16)
- $275 per week (disability-eligible)
Overall Deduction Limit: Cannot exceed two-thirds (2/3) of the claimant’s earned income for the year.

Tip: Use all receipts and claim up to the maximum for each eligible child. If you paid more than the limit, save receipts for future years (if still eligible).

How to Claim Childcare Expenses on Your Tax Return

Gather Receipts: Collect detailed receipts from each care provider, showing their name, address, SIN (for individuals), dates of care, and amounts paid.
Complete Form T778: Use Form T778 to calculate your allowable deduction.
Enter Amount on Tax Return: Transfer the allowable deduction to Line 21400 of your federal T1 return.
Retain Documentation: Do not send receipts unless requested, but keep them for at least 6 years in case of CRA review.
Provincial Programs: Some provinces (Ontario, Quebec, BC) offer additional childcare credits. Claim these on the relevant provincial schedule.

Pro Tip: If both spouses/partners have low income or are attending school, you may be able to split the deduction or claim higher limits. Review the T778 instructions for exceptions.

Frequently Asked Questions: Childcare Expense Deduction

Can I claim childcare paid to a grandparent or other relative?

Yes, if the caregiver is 18 or older and not the parent of the child nor your spouse/partner. The caregiver must report the income on their tax return.

Can I claim childcare if I work from home?

Yes, if you need childcare to perform your job/self-employment duties from home. You must be able to show that care allowed you to earn income.

Can I claim after-school programs?

Yes, if the main purpose is childcare (not lessons or tutoring) and you paid for the supervision during your work hours.

What if I have a child with a disability?

For children eligible for the Disability Tax Credit, you can claim up to $11,000 per year, regardless of age, and up to $275 per week for overnight camps/boarding.

Can I claim childcare for part-time work or studies?

Yes, but the deduction may be prorated based on the number of weeks you were working or in school. Review the rules for part-time eligibility on Form T778.

What if I missed claiming childcare expenses in a previous year?

You can request a tax return adjustment (T1-ADJ or ReFILE) for up to 10 previous years. Attach supporting receipts for the missed claim.

Related Guides & Resources

For tax tips for self-employed parents, see: Self-Employed Tax Tips