Deductions & Credits for Children

As anyone who is a parent knows, having children can be an expensive enterprise. Fortunately, governments recognize this and have provided a number of tax deductions and credits related to activities involved with raising children. This section will discuss some of the tax implications associated with children. See the CRA website for more on family, childcare and caregivers deductions and credits.

Family Tax Deductions

Family tax deductions are intended to recognize that many expenses associated with having children are unavoidable. As a result, governments have allowed these expenses to be tax deductible. Some of these deductions are discussed in the following sections.

Amount for an Eligible Dependant

  • For use by single parents.
  • If you supported a dependant who ordinarily lived with you in a home that you maintained, and you did not have a spouse or common-law partner (or were not living with, supporting or being supported by the spouse/partner at the time, except through support payments), you may be able to claim this amount.
  • A full claim may reduce your federal and provincial income tax. Only one claim is allowed per household, even if there is more than one dependant in the household.

Child-Care Expenses

  • Child-care expenses such as babysitting, daycare and summer camps are deductible by a single parent who is solely supporting a child or by the lower-income spouse (unless special circumstances apply, such as the spouse being in full-time attendance at school, in which case, the higher income spouse can claim them).
  • Payments for boarding school may be eligible expenses.
  • The current limits are:
    • $11,000 for an eligible child of any age for whom the disability amount can be claimed.
    • $8,000 for an eligible child age 6 or less, for whom the disability amount cannot be claimed.
    • $5,000 for an eligible child age 7 to 16 at the end of the tax year, for whom the disability amount cannot be claimed.
  • Federally, eligible child care expenses are limited to two-thirds of the lower income spouse’s income.
  • In Quebec, no such limit exists:
    • The Quebec program is a refundable tax based on the family’s income.
    • The same dollar limits on expenses apply.

Child Support

Child maintenance payments are not tax deductible and are not included in the income of the recipient, unless they relate to an agreement entered into prior to May 1, 1997.

Family Orders Enforcement Assistance Act

If your former spouse’s support payments are in arrears, you may request that Canada Revenue Agency send his/her income tax refund and other federal cheques he/she may be receiving to you. This request can be made through a court order; your lawyer can apply for one under the Family Orders Enforcement Assistance Act.

Revenue Québec will step in to recover support payments, that are in arrears. Prior to legal and administrative methods being taken, a letter is sent demanding payment. They also work with those in arrears, to reach an agreement, to pay the debt.

Family Benefits

Family benefits are money paid by the government to families to subsidize expenses involved with having children. Benefits allow parents to make the decision how to spend the funds, as opposed to prescriptive subsidy programs such as subsidized day care programs that only support certain spending options or behaviours.

Canada Child Benefit (CCB)

The CCB provides an annual benefit of up to $6,638 for each child under six and up to $5,602 for each child six to seventeen years of age. The benefit is phased out as adjusted family income increases. An additional amount of $2,832 is paid for each child who is eligible for the child disability benefit.

These amounts are paid monthly to eligible families and are not taxable. The CCB does not reduce the amount eligible for the:

  • Goods and services tax credit
  • Guaranteed income supplement
  • Canadian education savings grant
  • Canada learning bond
  • Canada disability savings grant

Child Disability Benefit (CDB)

The child disability benefit (CDB) is a non-taxable monthly payment for parents of children under the age of 18 with severe and prolonged physical or mental impairments and who are eligible for the disability tax credit (DTC). Recipients should use tax form T2201, which is a certificate for the tax credit for people with disabilities.

Child and Family Benefits Calculators

The Canada Revenue Agency has calculators that you can use to estimate payments to which you may be entitled under various child and family benefits. Check out the CRA website.

Tax Credits

Refundable Tax Credits

Refundable tax credits are actually another form of government payment to you. They can be applied to reduce tax owing, create a tax refund, or provide a payment even if you don’t owe any tax. You have to file an income tax and benefit return in order to claim them. Federal refundable tax credits include the GST/HST tax credit and the working income tax benefit.

Non-Refundable Tax Credits

The non-refundable tax credit only gives you back some of the tax you owe. Once your income tax is at zero, you won’t receive any more. Any additional unused credits are forfeited. Federal non-refundable tax credits include the basic personal amount, medical expenses, charitable donations and the caregiver amount.

Provincial Tax Credits

Your province may have additional tax credits of which you can take advantage. Check them out!

Children in Private Schools

If your child attends a private school, check with the school to determine if a portion of the tuition fees you pay is eligible for a claim as a charitable donation.

Disability Amount Tax Credit Transferred from a Child

If you are the spouse, supporting parent or grandparent of a child or other dependant eligible to claim the disability amount, you may be able to transfer any unclaimed amount to yourself. Up to 100% of the disability amount may be claimed on your income tax and benefit return or be split with another supporting person.

Canada Caregiver Credit

This tax credit may be claimed by family members who take care of dependants who have severe and prolonged physical or mental impairments. Both caregivers and their dependants must meet eligibility criteria. The dependant may be an infirm child under age 18 or a low-income adult, such as a dependent adult child.   

Dependants no longer need to live in the same residence as the caregiver, but the credit will be reduced dollar-for-dollar, once their income exceeds an annual threshold. 

Children Attending Post-Secondary Studies

There are a number of tax credits associated with post-secondary education. Depending on the circumstances, some of these credits may be transferable to parents or spouses. These credits will be discussed in the sections that follow.

Tuition Amount/Credit

  • The tax credit for tuition fees paid in a calendar year is based on the lowest marginal tax rate (provincial tuition credits vary by province).
  • Fees must be a minimum of $100 per course.

Tax Credit for Tuition Amount Transferred from a Child

  • If you are the spouse, supporting parent or grandparent of a student, you may be able to claim all or part of his/her tuition fees and receive a tax credit. 
  • The maximum tuition fee amount transferred on the federal return from a child (or from each child), is $5,000 minus the amounts that he/she uses, even if there is still an unclaimed part.
  • The tuition fee amounts that the student carried forward from a previous year cannot be transferred.

Provincial tuition credits vary by province.

Student Loans

  • Students may claim a tax credit on the interest portion of an eligible student loan payment.
  • Students can carry the interest forward for up to five years if no tax is payable in the current year.

Deduct Moving Expenses

  • If you have a child in post-secondary school and he/she had to move more than 40 kilometers away from home to attend, the student may be entitled to a “moving expense” deduction.
  • As long as the student has some employment (or scholarship) income while at school and a summer job at home, the travel costs to go away to school in September and return in May are deductible expenses for the student, just as they would be if you moved for employment.
  • Unused moving expenses are also available to carry forward to a future year.
  • Since the Canada Revenue Agency and Revenu Québec often ask for receipts, don’t try to claim expenses such as those for moving furniture unless you can produce a valid receipt.