Child care receipts and the tax deduction, explained for BC families

Child care is one of the largest line items in a young family's budget, and the federal deduction that recognises it is one of the more confusing parts of a Canadian tax return. Two things surprise families most often: the deduction usually has to be claimed by the parent who earns less, and the amount you can claim is capped in three separate ways at once. Neither is obvious from the form.

This is a plain description of how the deduction works and what to ask your centre for. It is general information rather than tax advice. Everyone's return is different, and a question about your specific situation belongs with an accountant or with the Canada Revenue Agency directly.

What a child care receipt actually has to contain

The requirement is simpler than most families expect. The individual or organization that received the payments must give you a receipt showing information about the services provided. There is no prescribed government form, no template a centre has to copy, and no standard layout.

What changes with the type of provider is whether a social insurance number is involved. Where child care is provided by an individual, a nanny, a family member outside the excluded list, or a person caring for children in their own home, you need that person's social insurance number to make the claim. Where care is provided by an organization, a licensed group centre like ours among them, the receipt carries the organization's name and no individual's number, because the payment went to the business rather than to a person.

That distinction catches families who move between arrangements. A family that used a nanny for a year and then moved to a licensed centre will find the two receipts look quite different, and only one of them involves anybody's social insurance number.

The three limits, and why the smallest one wins

Most families think of the deduction as a single number. It is actually the lowest of three separate calculations, and the one that binds is often not the one people expect.

The first is the basic limit, set by the child's age. For the 2025 tax year it is $8,000 for each eligible child born in 2019 or later, $5,000 for each child born between 2009 and 2018, and $11,000 for a child of any age who qualifies for the disability amount. These are per child, and they add together across the children in a family.

The second is simply what you actually paid. You cannot deduct more than the expense you incurred, so a family whose fees came to less than the basic limit is capped at what they paid.

The third is two thirds of the claiming parent's earned income. This is the limit that catches families off guard, because it interacts with the rule about which parent claims. A parent with modest earned income has a correspondingly modest cap, no matter how much the family spent on care or how high the other parent's income is.

Your allowable deduction is whichever of those three figures is smallest.

Why the lower earner has to claim

Where two parents live together, the person with the lower net income, including a parent with no income at all, generally has to make the claim. It does not matter which parent's bank account the payments came out of.

Families reasonably find this backwards. A deduction reduces taxable income, so it is worth more against a higher marginal rate. Assigning it to the lower earner reliably produces a smaller benefit than the same expense would generate on the other return. That is the design, not an error in your software.

Combined with the two thirds of earned income cap, the effect compounds. A family where one parent stepped back from paid work to manage the early years may find the deduction is worth very little, precisely because the parent required to claim it has the smaller earned income to measure two thirds of.

There are exceptions, and they are narrow. The higher earner may claim some or all of the expenses where the lower earner was enrolled in an educational program, was unable to care for children because of a mental or physical infirmity, was confined for at least two weeks to a bed, a wheelchair, a hospital or a prison, or where the couple was living separate and apart at the end of the year because of a relationship breakdown that lasted at least 90 days. In those situations the higher earner calculates first, and both parents file their own copy of the form.

What you cannot claim

The deduction covers care. It does not cover several things that often appear on the same invoice or in the same season of family spending.

You cannot claim medical or hospital care, clothing, or transportation costs. You cannot claim the education portion of fees at an educational institution, such as tuition for a regular program. You cannot claim fees for leisure or recreational activities, the examples the agency gives being tennis lessons and an annual registration for Scouts.

You also cannot claim expenses you were reimbursed for, or are entitled to be reimbursed for, unless that amount was included in your income. This is the rule that connects the deduction to the provincial funding many BC families receive, and it is worth being precise about.

How this interacts with the funding you already receive

BC families frequently have provincial funding reducing their fees. Those programs are administered by the Province, entirely separately from the federal deduction, and receiving one does not disqualify you from the other.

What funding does change is the amount. Because you can only deduct what you actually paid, a reduction in your fee is a reduction in your claimable expense. A family whose monthly fee was reduced by provincial funding deducts the reduced figure, not the full fee before the reduction. Your receipt should reflect what the centre actually received from you, which is the correct starting point.

None of this is a reason to skip either one. Provincial funding lowers what leaves your account each month, which is immediate and concrete. The deduction reduces taxable income once a year. They work on different parts of the same problem. If you are still working out which funding programs your family qualifies for, our guide to child care costs in BC walks through the three provincial programs and how they stack.

Getting the receipt, and checking it

January is the ordinary time to ask, covering the previous calendar year. Asking early leaves room to sort out a discrepancy before you file rather than after.

Differences between a centre's records and a family's memory are common and usually mundane. A payment sent in late December may have been received and recorded in January. A deposit paid at enrolment may have been applied to a particular month rather than spread across several. A funding adjustment may have arrived after the fee was originally charged. A receipt records what the centre received within that calendar year, which is not always the figure a family carries in their head.

Raise any difference with the centre before filing. It is a short conversation in January and a much longer one in April.

Keeping records you can actually find later

With an electronic return you do not send receipts to the agency. You keep them, and produce them if you are asked for them later. Filing on paper means attaching the completed form but still keeping the underlying receipts yourself.

That makes the practical task record-keeping rather than paperwork submission. A folder, physical or digital, holding each year's receipt is enough. Families who change providers, move cities, or use more than one arrangement in a year benefit most from being organised about it, because those are the years where a later question is hardest to reconstruct from memory.

If your family is weighing part-time against full-time enrolment, the cost side of that decision changes with all of this, and our post on part-time versus full-time care covers the scheduling half of the question.

A note on what this article is not

Tax rules change, dollar limits are periodically adjusted, and family situations vary in ways a general article cannot anticipate. The figures here come from the Canada Revenue Agency's own form for the 2025 tax year and were accurate as published. Anyone filing for a different year should check the form for that year, since the basic limits have been raised before and may be again.

For a question about your own return, an accountant or the agency itself will give you an answer that accounts for your circumstances. What a centre can tell you is what you paid it, which is the one piece of the puzzle we actually hold.

Frequently asked questions

What information does a child care receipt have to show?

The individual or organization that received the payments must give you a receipt showing information about the services provided. Where the care was provided by an individual rather than an organization, you also need that person's social insurance number. A licensed centre issues a receipt under its own business name and does not provide anyone's social insurance number, because the payment went to the organization rather than to a person.

How much can I actually deduct for child care in Canada?

The annual limit depends on the child's age. For the 2025 tax year the basic limit is $8,000 for each eligible child born in 2019 or later, $5,000 for each child born between 2009 and 2018, and $11,000 for a child of any age who qualifies for the disability amount. Your total claim is also capped at two thirds of your earned income, so the lower of those figures is what you can deduct.

Why does the lower-earning parent have to claim the child care deduction?

That is the rule the Canada Revenue Agency sets, regardless of which parent actually paid the bills. Where two parents live together, the person with the lower net income, including a parent with no income at all, generally has to make the claim. It frequently produces a smaller refund than families expect, which is why it surprises people the first time they file.

Are there any situations where the higher-earning parent can claim it?

Yes, but they are specific. The higher earner may claim part or all of the expenses if the lower earner was enrolled in an educational program, was unable to care for children because of a mental or physical infirmity, was confined to a bed, wheelchair, hospital or prison for at least two weeks, or if the couple was living separate and apart at the end of the year because of a relationship breakdown lasting at least 90 days. In those cases the higher earner calculates the claim first.

Can I claim child care expenses that my funding already covered?

No. You cannot claim expenses that you were reimbursed for, or that you are entitled to be reimbursed for, unless that reimbursement was included in your income. Where a provincial funding program reduced the amount your family actually paid, the deduction applies to what you paid after the reduction, not to the full fee before it.

Does the Affordable Child Care Benefit change what I can claim on my taxes?

It changes the amount, because the deduction only applies to what your family actually paid out of pocket. Provincial funding lowers your fee, so it lowers the expense figure on your receipt and therefore lowers the deduction. The two programs are administered separately, by different levels of government, and receiving one does not disqualify you from the other.

When should I ask my daycare for a tax receipt?

January is the usual time, covering the previous calendar year. Asking early gives the centre time to check its records against yours and gives you time to sort out any difference before you file. If a family joined partway through the year, or changed their schedule, that is exactly the sort of thing worth confirming rather than assuming.

What if the amount on my receipt does not match what I think I paid?

Raise it with the centre before you file, not after. Differences usually have an ordinary explanation: a payment made in late December that was recorded in January, a deposit that was applied to a different month, or a funding adjustment that arrived after the fact. A receipt is a record of what the centre received in that calendar year, which is not always the same as what a family remembers sending.

Do I need to send my receipts to the Canada Revenue Agency?

Not with an electronic return. You keep them and produce them if the agency asks to see them later. If you file on paper you attach the completed Form T778 but keep the underlying receipts yourself. Either way, keeping them somewhere you can find them again matters more than sending them in.

Can I claim child care for a child who is in kindergarten?

Care itself remains claimable even once school starts, since the deduction covers the cost of having someone look after an eligible child so a parent can work, run a business, attend school, or carry out research. What you cannot claim is the education portion of any fee. For a school-aged child the claimable amount is the care, not the schooling.

Before you visit

We issue a receipt for every family each January, and we are happy to walk through what is on it. If you are comparing centres in Port Coquitlam, Coquitlam or Port Moody and want to understand the full cost picture, including which provincial funding your family may qualify for, contact us and we will give you a straight answer about fees for your child's age and schedule.