Which Expenses and Providers Are Eligible for the Child Care Deduction?

Child care expenses can quickly become one of the largest parts of a family’s monthly budget. Fortunately, the Canadian tax system helps working families by allowing them to deduct certain eligible child care expenses from their income. This deduction is not automatic, and not all care qualifies. It is based on who provides the care, the purpose of the expense, and whether you meet specific eligibility criteria.

This matters when you are selecting a provider, preparing receipts, or determining whether certain programs—like camps or school-day extensions—can be included in your claim. Misunderstanding these rules could lead to missed deductions or, worse, a disallowed claim if reviewed by the CRA.

Below, we break down which expenses and providers are eligible, clarify common misconceptions, and help you prepare for a smooth and defensible claim.

What Makes a Child Care Expense Eligible?

To be deductible, a child care expense must meet three conditions:

1. It must have been paid to allow the parent or guardian to earn employment or self-employment income, attend school, or conduct eligible grant-funded research.

2. The care must be provided by an individual or institution that qualifies under CRA rules.

3. The payment must be documented with a proper receipt, and the care must have been provided during the relevant tax year.

If any of these conditions is not met, the expense is not eligible for the deduction—even if the care was helpful or necessary for other family reasons.

Types of Eligible Child Care Expenses

The CRA allows a wide variety of care arrangements, provided the care is primarily custodial. This means that the primary goal of the care is supervision and safety, not education or enrichment.

Common eligible care arrangements include:

• Daycare centres and nursery schools: Structured programs that provide day-time care for young children. These are eligible when fees are paid directly by the parent for care that allows them to work or study. Registration fees, regular attendance costs, and care during working hours are generally deductible.

• In-home caregivers and babysitters: Individuals hired to look after your child at home, either full-time or part-time. To qualify, the caregiver must be 18 or older and not closely related to the child or living in the same household. Payments must be documented, and the caregiver’s name, address, and Social Insurance Number (SIN) must be provided.

• Before- and after-school care programs: These services bridge the time between standard school hours and parents’ work hours. If they are primarily for supervision (not tutoring), the fees are deductible. This is true whether provided by the school itself or by a third-party provider.

• Day camps and summer camps: These qualify if they provide structured, custodial care during the day. Sports, arts, or nature camps can be eligible if the program is designed for general supervision. If the program includes both care and specialized instruction, only the care portion can be claimed. You may need a breakdown of fees from the provider.

• Overnight camps and boarding schools: Only a portion of the costs is eligible in these situations. The CRA provides specific limits on how much can be claimed for overnight care. These amounts are not the full tuition or boarding fees but a capped value per week that reflects the custodial portion of care.

• Transportation fees: If care providers charge transportation fees as part of delivering child care services—for example, driving the child to and from daycare—these costs may be included in your claim. However, transportation must be clearly tied to the care arrangement, not general commuting.

Which Providers Are Eligible?

Child care can be provided by individuals or organizations, but only certain providers qualify for tax deduction purposes.

Providers who meet CRA standards include:

• Licensed child care centres and daycares: These are registered providers operating in compliance with provincial regulations. Their services are generally accepted without question for tax purposes.

• Home-based care providers: These include private home daycares and unlicensed caregivers who provide regular care. As long as they meet CRA criteria and the caregiver is eligible, their fees are deductible.

• Independent caregivers or nannies: You may hire an individual to care for your child in your home or theirs. To qualify, the caregiver must be at least 18 years old, not the child’s parent or sibling, and must not live with the child. You must retain their SIN and provide proof of payment.

• Extended family members: Aunts, uncles, or grandparents may be eligible if they are over 18, do not reside in the same household as you, and are paid for their services. The arrangement must be formalized with a receipt and proper documentation.

• Camps or child-focused programs: Organizations providing summer or day camps may qualify, as long as the camp’s purpose includes child supervision. Educational or skill-based camps must provide a breakdown if a portion of the fee is for general care.

Providers who do not qualify:

Documentation You Must Keep

CRA may request verification of your claim at any point within six years of your tax return. You should keep the following records:

• Receipts that clearly show the provider’s full name, address, and SIN (if an individual), the dates of care, amount paid, and the name of the child

• Contracts or written agreements if care was arranged privately

• Bank records, e-transfers, or cheques showing payment to the provider

• Any correspondence or invoices from the provider detailing what the care included

If your claim includes care provided by a camp or blended program, request a written statement that separates the instructional or recreational portion of fees from the custodial care portion.

Special Considerations