Childcare Expense Deduction in Canada 2025

Updated March 2025 • bremo.io

The childcare expense deduction allows eligible Canadians to deduct the cost of childcare from their income. Unlike a tax credit (which reduces tax), this is a deduction that reduces your net income — making it more valuable the higher your tax bracket.

Eligible Childcare Expenses

You can deduct payments for childcare services that allow you (and your spouse/partner) to earn income, attend school, or carry on research. Eligible expenses include:

• Daycare and nursery school fees
• Babysitter or nanny payments (including to a relative over 18 who is not the child's parent)
• Day camps and day sports schools (overnight camps generally do not qualify)
• Boarding schools and overnight camps (limited amount)
• Before- and after-school programs

2025 Childcare Expense Limits

These are the maximum deductible amounts per child. Your actual deduction is limited to the lesser of: the eligible expenses you paid, the annual limit, or 2/3 of the claimant's earned income.

Who Can Claim — The Lower-Income Earner Rule

Childcare expenses must be claimed by the lower-income spouse or common-law partner. The higher-income spouse may only claim in specific situations:

• The lower-income spouse was attending school full-time or part-time
• The lower-income spouse was incapacitated due to mental or physical infirmity
• The lower-income spouse was confined to a bed, wheelchair, or prison
• The spouses were separated for at least 90 days in the year

Documentation Required

CRA requires receipts showing:

• Name and address of the childcare provider
• Social Insurance Number (SIN) if the provider is an individual
• Amount paid and the period covered
• Your child's name

If you pay a nanny or babysitter who is an individual, you should collect their SIN as CRA may ask for it. Payments to your spouse, the child's parent, or a person claimed as a dependant do not qualify.

How to Claim

Complete Form T778 (Child Care Expenses Deduction) and enter the result on line 21400 of your T1 return. The deduction reduces your net income, which in turn affects your eligibility for income-tested benefits like the Canada Child Benefit.

Child's Age Limit

Childcare expenses can generally be claimed until the end of the calendar year the child turns 16. There is no age limit for a child who has a disability that qualifies for the disability tax credit.

Single Parents

Single parents claim childcare expenses independently (there is no lower-income rule to navigate). The same limits and documentation requirements apply. Single parents may also be eligible for the Canada Child Benefit and the equivalent-to-spouse non-refundable credit.