If you’re a parent, the Canada Revenue Agency (CRA) offers a number of ways you can save money while raising your child. This is done through various tax credits and tax deductions.
Deductions for Child Care Expenses
You can use this deduction if you’re using daycare or babysitting facilities while you’re at work. The annual limits vary with the child’s age. If a child has a disability then the limit may be higher but the disability needs to be approved by the CRA before you can claim the benefit.
Expenses for the following childcare services can be claimed.
- Daycare centers or day nursery schools
- Nannies and babysitters
- Day sport schools and day camps with a primary goal of childcare
- Educational institutions that provide childcare services
- Camps, boarding schools, overnight sport schools where lodging is involved
If you’re using a babysitter or a nanny, then be sure to provide their Social Insurance Number along with any receipts to claim the credit.
If you’re using an overnight camp or boarding school, you might be able to claim amounts up to the following.
- $200 for a child under 7 years of age (per week)
- $125 for a child between 7 and 16 years of age (per week)
- $275 for an eligible disabled child (per week)
Pooled and Transferred Credits
If tax credits are already in a refund status, they may not have any effect on the tax payer’s return. In a family’s case, many of these credits may be transferrable to another family member. This is possible if the individual is the child’s parent, or your spouse or common law partner (while you are the child’s parent), or was the person claiming an amount for an eligible child.
In these cases the expenses should be claimed by the person with the lower net income.
1.Tuition Tax Credit
This credit can be claimed or carried forward by the student. It can also be transferred to the student’s parent, grandparent or spouse. This also includes the students spouse’s parent or grandparent.
Medical expenses can be claimed on the family totals. In order to qualify, these expenses must exceed the current level set by the CRA or 3% of the net income, whichever is lower.
Don't forget to follow up with a licensed public accountant to find out which deductions apply to your family.