How much child care can I deduct in Canada?

Up to $8,000 per year for each child under 7, $5,000 for each child aged 7â16, and $11,000 for a child eligible for the disability tax credit â capped overall at two-thirds of the claiming parent’s earned income. Weekly limits apply to overnight camps and boarding schools.

Which parent claims child care expenses?

Generally the parent with the lower net income must claim. Exceptions let the higher-income parent claim for periods the lower-income parent was in school, hospitalized, imprisoned, or incapable of caring for the child — documented on Form T778.

Is daycare tax deductible if I pay a family member?

Payments to a relative can qualify only if the caregiver is 18 or older and not the child’s parent (or your spouse), and you have a receipt with their SIN. Payments to the child’s parent or to your under-18 relative never qualify.

Are CWELCC reduced fees still deductible?

Yes — you deduct what you actually paid. The reduced fee is your expense; keep the receipts your provider issues.

Child Care Expenses Deduction Canada (2026): Line 21400 & Form T778 Explained

The child care expenses deduction (Line 21400, calculated on Form T778) is the main way Canadian parents get tax relief on daycare — and it's a deduction, not a credit, so it reduces taxable income directly. Here's how it actually works. (Educational, not tax advice.)

The limits

$8,000/year per child under 7 (at December 31)
$5,000/year per child 7–16
$11,000/year per child eligible for the disability tax credit
Overall cap: two-thirds of the claiming parent's earned income
Weekly per-child limits apply to overnight camps/boarding schools ($200/$125/$275)

Who must claim (the rule everyone gets backwards)

The lower-net-income spouse/partner claims — not whoever benefits more. The exceptions (claimable by the higher earner, computed weekly on T778): the lower earner was enrolled in school, hospitalized or confined for 2+ weeks, imprisoned, certified incapable of caring for children, or you were living separately due to relationship breakdown for the required period.

What counts

Licensed daycare and home daycare fees (including CWELCC-reduced fees — claim what you paid)
Nannies, babysitters and individual caregivers (receipt must show their SIN)
Before/after-school programs, day camps and day sports schools (where the primary purpose is care)
Overnight camps and boarding schools — within the weekly limits

What doesn't: regular school tuition, most lesson/activity fees where care isn't the purpose, medical expenses, payments to the child's parent or your under-18 relative, and unreceipted cash.

The mechanics

Collect receipts — individual caregivers' receipts must include their SIN (what a compliant receipt looks like).
Complete Form T778 with your software or accountant; the result lands on Line 21400.
Don't file the receipts — but keep them six years; child care is a routine CRA review category.

Note for providers reading this

Your families need annual receipts (by late February, ideally) with the right fields on them. If that's a painful evening every winter, Mitten generates compliant annual receipts per family in one click from actual recorded payments — and your parents stop emailing you in March.

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Frequently asked questions

How much child care can I deduct in Canada?: Up to $8,000 per year for each child under 7, $5,000 for each child aged 7â16, and $11,000 for a child eligible for the disability tax credit â capped overall at two-thirds of the claiming parent’s earned income. Weekly limits apply to overnight camps and boarding schools.
Which parent claims child care expenses?: Generally the parent with the lower net income must claim. Exceptions let the higher-income parent claim for periods the lower-income parent was in school, hospitalized, imprisoned, or incapable of caring for the child — documented on Form T778.
Is daycare tax deductible if I pay a family member?: Payments to a relative can qualify only if the caregiver is 18 or older and not the child’s parent (or your spouse), and you have a receipt with their SIN. Payments to the child’s parent or to your under-18 relative never qualify.
Are CWELCC reduced fees still deductible?: Yes — you deduct what you actually paid. The reduced fee is your expense; keep the receipts your provider issues.

The child care expenses deduction, explained