Business and Tax.com

You may claim child-care expenses to reduce your tax if you or your spouse pays to have someone look after your children so that you can:

	earn income from employment or self-employment;
	attend full-time or part-time, in an educational program offered by a secondary school, college, university, or other designated educational institution; or
	carry on research or similar work for which a grant was received.

The child must be:

	your or your spouse's child, or a dependent on you or your spouse and whose net income in 2001 was $7,412 or less;
	under 16 years old at some time in 2001.  There is no age limit if the child is mentally or physically infirm and dependent on you or your spouse.

You can claim:

	up to $7,000 for each child who was under 7 years old on December 31st, 2001;
	up to $4,000 for each child who was 7 to 16 years old at any time in 2001.

For those who, at any age, had a severe and prolonged mental or physical impairment for which you can claim the disability amount on your 2001 return, the maximum increases to $10,000.  You can claim up to $4,000 if a child is older than 16, who had a mental or physical infirmity but did not qualify for the disability amount. 

Usually, the spouse with the lower net income has to claim the child-care expenses. However, in some cases, the spouse with the higher net income can claim the expenses.

	individuals providing child care services;
	day nursery schools and day-care centres;
	educational institutions for the part of the fees that relate to child care services;
	day camps and day sports schools where the primary goal of the camp is to care for children; and
	boarding schools, overnight sports schools, or camps where lodging is involved.

To claim the deduction, you need to complete Form T778, "Child Care Expenses Deduction for 2001".  You do not have to send receipts with your income tax return, but should keep them in case the Canada Customs and Revenue Agency (CCRA) asks to see them later.