Tax Tip Tuesday — Childcare Expenses
Were you ready to ship your kids back to childcare after months of home schooling?
Don’t forget to claim your childcare expenses with your 2020 tax return. Childcare costs are not claimed as a tax credit, but are instead a deduction from income on your tax return. These deductions are claimed by the parent with the lower net-income for tax purposes.
Allowable childcare expenses are those costs incurred to enable the parents to earn employment income, carry on a business, attend an eligible education program for at least 3 consecutive weeks, or carry on research related work.
Some examples of childcare expenses include the following: day-care centres and nursery schools, individuals providing childcare services, day camps and day sports schools, educational institutions such as private schools (just the childcare portion), boarding schools and overnight sports schools and camps.
If your child is less than 6 years old at the end of the tax year, the limit is $8,000 per child. Between the ages of 7 and 16, the limit is $5,000 per child. For any age, when the disability amount is being claimed, the limit is $11,000 per child.
Let the experts make sure you are getting the most of your personal income tax return and connect with us today.