If you’ve recently separated or divorced, you may be wondering how this affects your tax benefits and credits. For tax purposes, you are considered “separated” after living separately for 90 or more consecutive days. In this blog, find out who can claim child care expenses, and how this affects the Canada child benefit.
VIDEO: Curtis at True North Accounting explains when you can claim child care expenses and who can claim them.
Child care expenses explained
If you are a parent and are running a business, or going to school or work, then you are eligible to claim child care expenses for all children under the age of 16. Daycare, summer camp, nurseries and nanny services are all deductible expenses for parents.
Learn more about the tax implications of hiring a nanny.
Who can claim child care expenses after separation?
In most cases, the tax deduction must be claimed by the parent in the lower tax bracket. However, if the parents are separated and share custody, they can each claim the child care expenses they have personally paid.
Learn more about claiming child care expenses in Canada in our blog.
Can the higher-income parent claim child care expenses?
Yes. Each spouse can claim the child care expenses they paid if both supporting parents were living separately by the end of the tax year due to a breakdown in the relationship.
Can parents share the Canada child benefit?
Yes. The Canada child benefit (CCB) is a tax-free monthly payment made to eligible families to help with the cost of raising children under 18 years of age. If parents have 50/50 shared custody of the child, each can receive half of the CCB.
Divorced or separated? We can help.
If you’re divorcing, you should update your marital status with the CRA. Separating couples should wait until they have been apart at least 90 consecutive days to notify the government.
If you have more questions about your specific situation, we’re happy to help. Our Chartered Professional Accountants (CPAs) have extensive knowledge of the changing tax laws. Let us help you with deductions, write-offs, expenses, tax returns, GST filing and more.
Read more about Personal Tax topics that may be helpful to you and your small business.
