Child Care and Family Credits Glossary

Age and Disability Limits – Annual maximum claim amounts per child based on age or eligibility for the Disability Tax Credit: $8,000 (under 7), $5,000 (ages 7–16), $11,000 (with disability).

Before- and After-School Care – Supervision services provided outside standard school hours that qualify for deduction if not primarily academic in nature.

Children’s Fitness and Arts Credits – Provincial tax credits available in certain provinces (e.g., Manitoba, Saskatchewan, Quebec) for registration fees paid for a child’s participation in supervised physical, artistic, or cultural programs.

Child Care Expenses – Costs paid to have someone care for a child so a parent can earn income, attend school, or perform grant-funded research; deducted from income rather than claimed as a credit.

Claim Coordination – The process of determining which parent will claim an eligible tax credit or deduction to avoid duplicate claims and maximize tax benefit.

Claiming the Same Expense Twice – A prohibited practice where the same dollar amount is used for both the child care deduction and a fitness or arts credit; families must choose one claim path per expense.

CRA Form T778 – The Canada Revenue Agency form used to calculate and report eligible child care expenses for deduction on a personal tax return.

Custodial Care – Supervision-focused care for children, rather than educational or skill-based instruction; a key requirement for deductibility under the CRA.

Day Camps and Summer Camps – Programs that provide daytime custodial care during school breaks; only the supervision portion of the fee is deductible, not specialized instruction.

Dependent-Linked Credit Claiming – Only the parent claiming a child as a dependant may claim associated tax credits, such as activity credits or the Canada Child Benefit.

Disability Tax Credit (DTC) Coordination – When a child is eligible for the DTC, provincial activity credits may offer enhanced limits or extended age eligibility; requires DTC certification on file.

Disqualified Caregivers – Individuals or situations that do not qualify for the deduction, including siblings under 18, spouses, or unpaid caregivers.

Earned Income – Employment or self-employment income, or income from eligible research grants, which qualifies a parent to claim child care expenses.

Eligible Activity Expenses – Registration or participation fees for structured, supervised programs lasting a minimum duration (typically eight weeks or five days for camps), focused on skill development for children under a certain age.

Eligible Child Care Expense – A payment made for custodial care that allows a parent to work, attend school, or perform research, provided it meets CRA criteria and is supported by proper documentation.

Eligible Child Care Providers – Individuals or organizations such as daycares, nannies, day camps, or educational institutions providing child care services, provided they meet CRA eligibility criteria.

Higher-Income Spouse Exception – Situations where the higher-income spouse may claim the deduction, such as when the lower-income spouse is in school, infirm, incarcerated, or absent.

Home-Based Care Provider – An unlicensed or informal caregiver providing regular care in a home setting; deductible if meeting CRA requirements.

In-Home Caregiver – An individual hired to care for a child in the home, eligible for the deduction if they are over 18, not a close relative living in the same household, and properly documented.

Licensed Child Care Centre – A registered facility that complies with provincial regulations, generally accepted without question by the CRA for tax deduction purposes.

Lower-Income Spouse Rule – The requirement that the spouse or partner with the lower income typically must claim the child care deduction, regardless of who paid for the care.

Net Income Reduction – The effect of deducting child care expenses, which lowers the taxpayer’s income and may increase eligibility for income-tested benefits like the Canada Child Benefit (CCB).

Non-Refundable Tax Credit – A tax credit that can reduce taxes owed to zero but does not result in a refund if the credit exceeds the amount of tax payable.

Overnight Camps and Boarding Schools – Programs where only a capped portion of weekly costs can be claimed, based on CRA’s limits for custodial care expenses.

Part-Time School Deduction – A reduced deduction for care expenses during periods when the parent was enrolled in school part-time; proof of enrollment is required.

Provincial Tax Credit – A deduction or reduction in tax owed based on eligible expenses claimed on a provincial income tax return; may vary by province in terms of amount and eligibility rules.

Receipt Requirements – Documentation that must include the provider’s name, address, SIN (if an individual), amount paid, dates of service, and the child’s name; required for all claims.

Receipts Requirement – The obligation to keep detailed records of child care payments including caregiver’s name, SIN (if an individual), amount paid, service dates, and the child’s name.

Shared Custody Claiming Rule – In shared custody situations, each parent may only claim the portion of the activity expense they personally paid and must retain separate documentation.

Shared Custody Rule – A guideline stating that each parent can only claim child care expenses they personally paid and must retain their own receipts.

Tax-Ready Receipt – Documentation from a program provider that includes all required information to support a claim: child’s name, activity details, dates, fees, and provider contact information.

Transportation Fees – Costs charged by a care provider for transporting the child as part of delivering care services; eligible only if clearly connected to the child care arrangement.