Ask the Expert… Are my kid’s summer camps tax deductible?

While the final school bell of the year is music to every kid’s ear, for most parents it means it’s time to figure out their summer childcare situation. Day camps, sports schools, overnight camps and in-home care are all great options for ensuring your child is taken care of while out of school, but it’s important to know the limits on claiming any associated expenses as childcare expenses.

Daycare and in-home care

Generally speaking, licensed daycare facilities, nursery schools, nannies or other in-home care providers can be considered eligible childcare expenses. If you use these services, ensure you obtain a detailed receipt with the organization or individual’s name and the services rendered so that you can submit it alongside the T778 form come tax season.

Day camps and sports camps/schools

Day camps and sports camps/schools expenses are also generally considered eligible; however, the CRA stipulates that the primary goal of these camps must be to care for children (i.e., an institution offering a sports study program is not considered a sports school). Expenses for older children who attend high-level sports training camps are likely ineligible to be claimed.

Overnight camps

Overnight camps or overnight sports schools are considered eligible up to a certain amount, which can vary from $125 per week to $275 per week depending on the age and ability of the eligible child.

Siblings and relatives

In most cases, you cannot claim money paid to certain relatives as tax deductible, as per the list of excluded relatives outlined by the CRA. These include:

• The child’s parent
• The spouse or common-law partner of the father or mother of the eligible child
• A person under 18 who is related to you by a blood relationship, marriage, common-law partnership or adoption (this excludes a niece, nephew, aunt and uncle)
• A person considered a dependent for whom you or another person claimed an amount on line 30400, 30425, 30450 or 30500 of your/their return

Deduction limits

As with all tax deductible expenses, there are limitations on the maximum amount of childcare expenses you can claim. Limitations based on the child’s age at the end of the tax year include:

• $8,000 per year for a child under 6 years of age
• $5,000 per year for a child between the ages of 7 and 16
• $11,000 for a child form whom the disability amount may be claimed

In most cases, the lower income earner in your household must claim the deductible childcare expenses, which is important when considering that childcare expenses are capped at 2/3 of net income. For example, if you have a 5-year-old child and you earn $10,500 net income in the tax year, the maximum you can claim for childcare expenses is $7,000 for the year.

Other expenses

Other expenses you may overlook which qualify for as deductible childcare expenses, including the cost associated with placing an ad to find a childcare provider and fees paid to childcare placement agencies or other mandatory registration fees.

If you’re unsure of whether your child is considered eligible, or if you’d like to know exactly which expenses you can claim, talk to your DMCL advisor and they’ll be happy to help. For a full list of deductible childcare expenses, see Income Tax Folio S1-F3-C1, Child Care Expense Deduction.