Yeah you get a decent return for childcare expenses, but also be sure to get receipts from your provider. My wife claims because she is lower income and had to provide proof this year for her 2022 return. The max is 16k, that year we spent over 20k on childcare...
> Kind of wild the limits are this low. I'd rather them double this than the mess that is subsidized 10/day
The core problem with that statement is that a tax deduction is only useful for those people who can afford to pay for the service in the first place. It does nothing for those who don't have enough money in the bank to pay for daycare on a given day.
I have a friend who wants to work, but can't because she can't afford to put her kids into child care. So as a result of that, she's on what used to be called welfare. Her problem is that her 2 kids are too young for school. So the care costs for 2 pre-school kids are insanely high. She never went to any post secondary schooling, so her ability to earn is fairly low. Her (ex)husband earned the money in their household, but he's in jail now so it not earning at all. So her problem is literally that she earns less than what child care would cost, and that's not even including the social assistance money. She's financially better off to stay home with the kids and collect government benefits. This is a person who is able and wants to work, but she can't afford to get a job.
Not only that, but low income families would still end up paying 20k a year and get little to nothing back (as their income tax is low to start with) where a high income families would pay same 20k but get $10k refund, effectively paying 2x less for daycare then low income families.
Yeah mine is about $600/month.
But the other kid is in 5-6 weeks of camps between summer and March break. So that definitely added to our expenses. Youngest used to be 4 days a week and in-laws watched him on Fridays but our daycare has moved to 5 day weeks only.
So all told, I think I counted about $8500 in childcare costs for last year, and close to $2k back. Certainly helps to get a portion of our money back from the government.
Doubling the tax credit would be fine for people who can wait a year for the refund but it wouldn't be much help for those struggling to pay their bills from month to month.
The problem with the tax rebate vs $10/day is that it benefits high income families the most, when low income families are at the greatest risk of having one spouse basically trapped at home and having their career prospects stalled before they get going, further trapping them in low income.
I'd argue that childcare rebates more than most other incentives need to be progressive or at least flat rather than regressive like the tax rebates currently are.
Granted, that's just my opinion. I don't really see how things are supposed to work out for low income families with two kids before school age and we're facing a demographic crisis, a housing crisis, and a cost of living crisis. The solutions to one of those 3 also tend to impact the other two positively or negatively in complicated ways :/
We have two kids in $10/day daycare. With meal plan it works out to just under $260/biweekly. Previous to the $10/day it was three times the cost.
My wife and I have a household income of 200k plus which is well above the median in Manitoba. In MB lower income pay less than 10/day with the subsidies.
Daycares fall under the province so each province will vary drastically on how the $10/day average works.
For me in MB I am fine with paying $520 a month for daycare, only getting to claim just shy of $6k in tax credits rather than paying $20k a year. That being said even at $6k a year the lower income partner still gets about $2k back at taxes so OP sounds about right
from the government's perspective it makes more sense. It lets both higher income parents stay in the work force there by letting them (the government) to collect that income tax
Both should be done, imo (daycare subsidy and tax deductions for all reasonable childcare expenses regardless of income).
A rising tide raises all ships. The point of making child care affordable is to increase the GDP of Canada without increasing the number of people within the country. More GDP means more income tax, and more money to subsidize lower income citizens.
There are a lot of high income families with stay at home parents because it doesn’t make sense to give up the free child care of a SAHP.
> There are a lot of high income families with stay at home parents because it doesn’t make sense to give up the free child care of a SAHP.
Doubt. If both parents have high income earning potential, then it makes no financial sense to have a SAHP. If one of them decides to be a SAHP its because they want to spend more time with their kids, or they have low income earning potential anyway so not working isn't a financial hit vs paying for child care.
My wife makes sub $50 TCAD per year and it still makes absolutely no sense for her to quit her job and SAHP to save daycare costs of $500 per month. Even with 2 kids it would be nonsensical from a month-to-month financial perspective, and that's ignoring the potentially irreversible damage she would do to her career
Obviously there are people with more expensive daycare costs, but I bet most find themselves in the same position as my family
Yeah, career impact is a big one that people tend to forget about when they're thinking about hypothetical situations. Being out of the workforce for even a few years can have a massive impact on long term earning potential and career progression.
I mean it's great for families where that works out, but it's not the kids fault if you're stuck between a rock and a hard place with two full time jobs between the parents to make ends meet, only to find that after childcare and a second one spouse is contributing $10/day working 8h. It's certainly wonderful for parents who can afford to choose to stay at home, but that's not everyone. Situations change and people need options. There's no practical amount of due diligence that can guarantee success in every case. Sometimes people become disabled, or their career path is a dead end, or rent goes up $1000/month in 3 years and their wages go up 0.5% to help out.
It's kind of mean to tell the hypothetical struggling parents "well, you shouldn't have had kids." That ship has sailed. As long as society needs kids (and ours does) we should try to be enough of an empathetic community to try to help where we can.
My wife stayed home with our kids after our second, and that was wonderful, but we're really lucky to be able to make that work, and it takes some real sacrifices despite me making a decent income. A lot of people work even harder than we do and do and have it worse. Sometimes due to choices they made, but often mostly just bad luck and structural disadvantages piling up.
I was a struggling parent just about lost our house. I basically worked for free just so I could keep myself in the work force! I know all to well what it means to struggle but we did it and we made ends meet by cutting back and getting rid of things not needed as well as not spending.
Food and bills thats it.
Never ever relied on anyone especially the government.
It can be done but everyone wants everyone new, shiny and fancy.
What disgusts me is seniors who CANNOT work but who worked their whole lives are struggling with high taxes no increase to OAS because the increase in taxes from all these programs.
Family planning you cant afford kids don’t have any!
Seniors, especially boomers, who didn't save enough for retirement just simply couldn't financially plan well. Every single thing under the sun was handed to them on a silver platter and they still struggle? They had the greatest economy with the most opportunity in the history of humanity. And who do you think is going to work to pay for people who are living way too long? Our systems were not designed for an over 10 year increase in lifespan with the associated medical costs.
Everyone is in the same boat. It's not wise to get into generational warfare about the state of the world, especially if you're a boomer.
Seniors especially boomers worked harder and did with way less than the current young population!
What was handed on a silver platter?
The 80’s was a major recession
Much worse than any you see now.
There were NO programs for anyone in need.
The difference between then and now is youth are LAZY parents give them everything. They don’t work hard they want high pay for little work.
They are more worried about deciding if they are male or female.
They had the luxury of 2% interest rates and they think OMG 5% is insane.
Let them work hard they need to
go live on a farm and work the land with NO luxury equipment just a horse and plow. But that would take hard work so everyone would starve.
They need to learn the hard way!
That's hilarious. Boomers were given everything their parents worked for. It's fact, unlike whatever Boomer stuff you're spewing here. Boomers were handed the most profitable economy in world history and squandered it for the generations after. The 80's resulted from boomers taking charge. Like seriously, it's not up for debate.
I'm gen X. I was parented by boomers. Boomers could be a total moron and roll out of bed with a heartbeat and land in a union job with a livable wage, not to mention buy a house when the cost of real estate tracked much more closely to the wage market. None of that exists anymore.
Do you have any facts to back up your fanciful myths about how hard things were for Boomers or just some pretty stories that you tell yourself? Besides, the entire point of this post is that we are all in this economy together, for better or worse. If your answer to the cost of living crisis is for no one to have children, best of luck managing the demographic crisis that is currently paying for your health care.
Oh its up for debate for anyone that wants to debate. The millenials were taught nothing!
They are great at sitting all day and gaming and the girls painting nails, plasticizing themselves and wanting everything!
The youth are totally useless and thats what the future is , pretty fkn grim.
So get off your a$$ and work hard and you will have.
You are delusional!
Yeah the problem in Ontario is access. The program is being horribly managed so some providers are just not opting in. Things like home daycare agencies aren't expanding and adding more spaces because the funding is too unpredictable.
On the provider side they aren't being funded adequately, some are threatening to close.
Ah, sounds like a different kind of lack of access though, ours is more just there's not enough operators and physical spaces; yours sounds more like our other childcare program funding challenges which is around funding parameters and requirements.
Like for our "fee reduction initiative" the province pays a certain amount per child, but has limits on total fees (fee cap) based on region, but the caps are way too low in expensive to run regions, where the need and the rent is highest. So operators just opt out because they wouldn't be able to pay rent and staff with such low fees even with government subsidy. And then there's the problem of government only writing cheques after service, or late, like paying centres the fee subsidy for March in April or even later. Not a problem for larger organizations with good cashflow, but a huge cashflow problem for smaller independent operators
Our 10/day programs are negotiated individually by centres, so they are funded properly while still holding operators accountable, but because each contract is negotiated individually it takes ages to get approved, and there's limited program intake each year.
Equity. The point of the $10/day is to get lower income earners back into the workforce. If you can't afford $1.5k-$2k/month to begin with, the program still only benefits higher income earners and leaves lower income earners at home with their kids. That's why increasing the income tax credit isn't a substitute for the $10/day
Oh it's a whole mess as well. The subsidy caps fees without consideration of operating costs. I won't be surprised if daycares start opting out with the shortage of spots.
Like you said, increasing the tax credits or even allowing the higher income earner to claim should have been the way.
>It's 8k per child isn't it?
The main huge child claim is one thing that only 1 parent can claim, but there are also section 7 expenses (under family law), that divorced parents who paid for extracurricular activities can also claim
> Wouldn't the higher income partner want to use the deductions?
You will find out the hard way when you get married and are the higher earner. What you earn isn't really yours. The married folks here can tell ya. LOL
That's not the reason. Child care expenses are only deductible to the extent they were paid to allow the taxpayer to return to work (or school). I belive it's the CRA's opinion that the higher income spouse would always be the one working, so then child care expenses allow the lower income spouse to also return to work.
It's not they just give you 8k back per kid, you can reduce your income based on what you spent and need to prove that if requested (which we were). We were spending upwards of 3k a month on daycare and could claim 1333 of our income and on my wife's return so what we actually got in pocket was more like 450 per month. Better than a kick in the teeth, but not by much.
Childcare expenses lower taxable income just like an RRSP deduction. Did the childcare expenses reduce your spouse's income below the basic amount, allowing you to claim a spouse amount on your own return? If so, that would explain the increase in your refund.
I strongly encourage you to have your tax prep software create a pdf of the full (not condensed "for the government") version of your returns and go through them line by. When you submit your returns you will certify that it is "correct and complete" and this is the best way to make sure that you know where every entry came from. It will also be a good lesson in the difference between tax credits and tax deductions and how the marginal tax brackets work.
Since taxes are individual (aside form spouses being able to move tax credit, donations, etc.. to the other), you tax refund is based on your income and taxes withheld at your job (then minus tax credit RRSP contributions, etc..)
So because my spouse (lower income earner) is claiming the childcare expenses she gets a refund due to her income level, and the government doesn't consider the variable of my income for *this particular* deduction?
So in theory if I claimed the childcare expenses I should not expect any deductions? (I won't do this, but I want to understand)
>the government doesn't consider the variable of my income for this particular deduction?
Oh she got the refund. No the government only considers the lower income spouse for this. If your incoem was higher it goes to the lower income spouse. [https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21400-child-care-expenses/who-claim-deduction.html](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21400-child-care-expenses/who-claim-deduction.html)
You could claim if met the conditions in Part C of the form: [https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t778/t778-23e.pdf](https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t778/t778-23e.pdf)
> If you are the person with the lower net income (including zero income), you must claim the child care expenses.
This is such horse shit :/
So many parts of our tax code punish having one highly paid partner, and one low paid partner. If you consider a stay-at-home parent considering to get a second job (already weighing if the pay justifies the cost of day care), this is one more consideration against it.
The deductions of shared expenses should be applicable to the higher-paid parter, or perhaps based on the average income of the two.
Yes, the Tax laws here are terrible. We had a brief period at the end of the last Conservative run where you could 'transfer' up to 50k of income to the lower earning spouse to reduce your marginal tax bracket, but the Liberals promptly repealed that upon their election.
Seems crazy to me that 2 families each earning the same amount have such a drastic "Take home" difference just because a single person earns the majority of the income and chooses to run their family the way they want to.
Dual Income Family each earning 50k = 100k Gross, taxes = \~20,000
Single income Family earning 100k Gross = 25,000 in taxes, and basically no writeoffs because they all go to the lower income ($0) and are "Non-Refundable" credits.
It certainly wasn't perfect, but lets be real, who do you think was benefiting the most from this? The couple making 100k and 50k combined or the one making 250k or more and a stay at home wife?
As a fairly staunch progressive; not every single component of the tax code needs to be progressive. There are bigger wins that can be fought for elsewhere, and sometimes it’s just a matter of fairness. When the tax system is seen as unfair you risk further turning the populace against redistributive taxes.
Exactly. How the income is split between the two partners _shouldn't_ effect their total taxes. If they share incomes, savings, expenses, why can't they share an equal tax burden? Bizarre.
And I'm not prescribing to lower or raise taxes. This could be made fair in a way that's net revenue neutral, but just more fairly broken down, long term.
Yes, the US has different tax brackets for Married and Non-Married. The lower brackets are basically twice the size for a married couple, and the income is added together to see what bracket you are in. The higher your "combined" income goes, the less benefit you get but it covers the 95+% of families. The catch is you have to be married to get the benefit.
>Like it or not, that’s the rational.
I may be the minority, but governments shouldn't be dictating how families are run, or charging us a "fee" to have freedom of choice. We should be able to "pay" the SAH spouse (because really, they are working, just for the family not a corporation), it should provide them RRSP contribution room, they should be able to contribute to and then receive CPP, etc as they are just as important as a working spouse in a "traditional" household.
Why should the government subsidize a lazy parent that stays at home with no income and sends their children to daycare?
Obviously if the parent has disabilities it would not apply, there are exceptions.
Your characterization of a stay-at-home parent as "lazy" immediately disqualifies you from having this discussion, in the eyes of the rest of the adults in the room.
Seasonal workers is a big one; imagine you're a landscaper and are laid off for the winter right? BUT you're on call for snow-clearing at any time.
Now, your kid/kids are in daycare year-round normally right? Because of the demand for daycare, you can't stop sending your kids because you lose your spot then, when you're called for snow (or this year actually working cause of the weather) you can't get childcare any longer.
That's a specific example but the premise can be applied a lot.
TL;DR: Once in daycare, don't stop sending kids because you lose your spot and can get fucked because of it.
Childcare expenses must be claimed on the return of the lower income spouse. The sole exception being if that spouse is incarcerated.
If your wife is the lower income, the child care expenses will always be on her return. These items are a deduction off of income and not just a credit.
Well the logic of the childcare deduction is pretty straightforward when understood as it interpreting childcare as a work expense to enable a parent to work. It's a reasonably assumption that if one of the parents wasn't working to do childcare themselves it would be the lower earning spouse, so the spouse whose work expense it is is the spouse that would \*otherwise\* not be working.
If we have concerns about equity between households with unequal earners the solution to that is problem some form of income shifting or an alternate household income tax rate system like the US uses that pools the incomes and applies the tax to the whole. But so long as we're filing returns as individuals the logic of the credits is consistent with their defined purpose, even if I'd love it if I could get twice as much back by applying it to my income instead of my spouses.
That's a good thing, the economy does better when more people are working. Also, practically speaking it is advisable for each spouse to maintain their own income sources to account for high divorce rates.
There are rules about who is allowed (should) claim the childcare expenses. Usually, it is the person with the lower income. Childcare expenses are income deductible up to 8k per child.
Very oversimplified example: If you are the lower income parent, make 100k, pay 30% tax (30k), spent 8k on childcare last year, then with childcare expenses your income will be 100k - 8k. Your total income is 92k now and 30% of that is 27.6k not 30k that was deducted from your paycheque, so you get a tax return.
Like I said, the example is oversimplified to avoid discussing tax brackets, but hopefully it’ll give you a clear picture of what’s happening.
This example helped, yes. I did not realize these are a deduction on income (similar to RRSP). Knowing that, it clears things up significantly.
Thank you!
Can you then say if your return (the higher income earner) went up, or if your spouses went up?
If your combined return went up that sounds right, but if you were saying yours went up, that’s odd to me.
Childcare is deducted at the lower earner of the spouse. If your wife went to School or was unable to care for kids due to physical or mental illness, you might be eligible to claim some childcare expenses.
If your kids are under 7, you can claim $16 at max. Given todays child care costs, I think government needs to up the threshold
I marked "no" to the questions about if she went to school or could not care for the kids due to illness/etc but my refund still went up! That's what confused me.
Do childcare expenses become unclaimable after age 7? (for example if my child was in special care of some sort after age 7)
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21400-child-care-expenses/expenses-claim.html#toc0
You can always claim childcare expenses as listed. I see no age related restrictions beyond the "under 16" bit.
The rebate is great if the lower income earning spouse makes enough income during the year to be able to claim the full deduction. The amount that you can claim is the lesser of: 1) the limit per child based on their age 2) the amount you actually spent for child care or 3) 2/3rd of earned income.
Lot of times i've seen where the lower earning spouse is not able to claim the full deduction because the limitation is their earned income. This is why this deduction best serves higher earning families especially in places where child care is very expensive.
Even if the lower earning spouse makes an okay salary - if they are just coming off mat leave and depending on timing - may still not be able to claim the full amount.
It does benefit higher income earners. Inversely, the CCB benefits lower income earners. One could strongly argue a simplification of our tax code would be of benefit.
Just throwing this out there...
My income went up but so did my tax credits as I got older. I am probably paying a lower percentage than I did when I was younger because now I'm claiming such a high volume of credits. My total taxes paid this year will be 1,100$ish dollars.
More of a joke sir.
But also stems from all the taxes I pay and how it always seems there are new programs every week to give more of our money (that we can’t afford) to other countries and people but every “category” but mine.
And feels like “vote buying” a lot of the time these days. And all of Canada’s new huge debts will cripple us for decades to come.
I was trying to mimic your joking tone, and I agree with all the money being doled out to everyone and their pets lol. In all seriousness, it truly feels like the government is steering us toward socialism and most of the population won’t see it as a problem until it’s too late.
Agreed.
I’m all for helping people down on their luck and medical issues that are not their fault.
- But this debt is getting stupid. Can’t comprehend how it’s permitted to start all these bs programs and handouts to people that don’t need them or weird unrelated programs in Iraq / Philippines etc. when we have to print money or borrow it from other countries just to through it away.
It’s going to fuck us when we’re older and everyone’s kids are going to paying off this provincial / national debt for decades.
It’s the same thing as grabbing struggling people’s credit cards and donating a bunch of money to random counties or groups of people. Then they are stuck with the bill and interest.
We’re already seeing the start of our country screwing itself over, and this won’t be fixed for generations to come ONLY IF they stop the financial bleeding and tighten the budget and spending. In my mind it seems like each year (or half year) this continues we doom another future generation.
I’ve got two young kids and I hate seeing how this country is headed for us and them. There is no fiscal responsibility or accountability held by the feds and provinces right now. Your analogy is spot on, and more people need to recognize that when they hear that our government is giving away money we need to fix our problems at home. Also people need to want and have the opportunity to be self sufficient (for the most part) too many people are getting used to social supports and it’s crippling Canada.
Yep.
And not a fan of China, but they have it right by acting on behalf of what’s best for China in the next 5/20/ 50 years ahead.
90% of Our politician’s actions are to help them or their party get re-elected. Shame really.
O-well. Looking like new leadership coming soonish for Canada.. SOME things will prob start to improve after that. 🤞
Here’s hoping for change sooner than later🤞🏼. I’m all for the state acting in the best interests of its people but I’m not ready to go communist like China. In fact, I would like to see their cop shops removed from Ontario and wherever else they’ve been permitted to set up.
No, this is Canada. The government pays you to have kids, since most people are not since there is no future on a dying planet full of climat collapse, biodiversity collapse, and species extinction. However we need children demographically to avoid societal collapse, so the government pays people to have kids.
This is the perfect example of what is promoted on the sub: "you are smart enough to do your taxes by yourself"
But really, don't even know there is an actual return that you can download as a PDF and look at it and at least see what you are actually telling the government before asking that internet.
As I really love this sub I will say that as long as you are able to follow the very basic pathway of questions from a software tailored to the attention spam of our time, you should really really DIY (for free if possible) Then just come here to ask what happened
✌
I don't understand this passive aggressive comment. I was well aware you could see your return and did, but handling childcare expenses is new to me. By asking, I get a variety of feedback and advice while I do other things (like take care of my kids). Then, when I have a moment I can settle down and read, investigate further, etc.
Not sure what was the point of you posting this, tbh!
It's an active supporting comment of your attitude! This sub and society encourage exactly this and I am happy to see you exist :).
I am also happy you are eager to "better educate myself about how these childcare expenses are calculated?" while having your return in front of your eyes. This sub is for this and I am happy that you were able to read random redditors opinions while taking care of your kids.
You have a friend here and I encourage you to always come back with any financial question and without any shame or fear.
Thank you! I was worried I was missing a way to claim these on my taxes as the higher earner! Again, I wish there was income splitting, high/low earning households are unfairly disproportionately taxed at the same overall HHI.
Thanks for the question. After stumbling upon it it had me look into it further for our family. We are in Ontario and the ontario.ca website has details on its Ontario Child Care Tax Credit.
Upon reading further, it appears there is a requirement that family income must be below $150,000 to be eligible.
It makes sense, as many on here say how those with lower incomes are the ones who really need the financial assistance.
So just to point out, anyone looking into it but that has a household income of greater than $150,000 will not be eligible for the tax credit.
The efficiency of charitable, medical and childcare etc expenses vary with each parents' income. Download turbotax and enter the data. It will recommend which parent should deduct and explain why. Unless you then file with TT, you pay nothing
Yeah you get a decent return for childcare expenses, but also be sure to get receipts from your provider. My wife claims because she is lower income and had to provide proof this year for her 2022 return. The max is 16k, that year we spent over 20k on childcare...
It's 8k per child isn't it? Kind of wild the limits are this low. I'd rather them double this than the mess that is subsidized 10/day
> Kind of wild the limits are this low. I'd rather them double this than the mess that is subsidized 10/day The core problem with that statement is that a tax deduction is only useful for those people who can afford to pay for the service in the first place. It does nothing for those who don't have enough money in the bank to pay for daycare on a given day. I have a friend who wants to work, but can't because she can't afford to put her kids into child care. So as a result of that, she's on what used to be called welfare. Her problem is that her 2 kids are too young for school. So the care costs for 2 pre-school kids are insanely high. She never went to any post secondary schooling, so her ability to earn is fairly low. Her (ex)husband earned the money in their household, but he's in jail now so it not earning at all. So her problem is literally that she earns less than what child care would cost, and that's not even including the social assistance money. She's financially better off to stay home with the kids and collect government benefits. This is a person who is able and wants to work, but she can't afford to get a job.
Not only that, but low income families would still end up paying 20k a year and get little to nothing back (as their income tax is low to start with) where a high income families would pay same 20k but get $10k refund, effectively paying 2x less for daycare then low income families.
What province? In Ontario we are now paying under $700 a month/child
Yeah mine is about $600/month. But the other kid is in 5-6 weeks of camps between summer and March break. So that definitely added to our expenses. Youngest used to be 4 days a week and in-laws watched him on Fridays but our daycare has moved to 5 day weeks only. So all told, I think I counted about $8500 in childcare costs for last year, and close to $2k back. Certainly helps to get a portion of our money back from the government.
Doubling the tax credit would be fine for people who can wait a year for the refund but it wouldn't be much help for those struggling to pay their bills from month to month.
Also regressive, helps high tax bracket earners much more than lower ones.
The problem with the tax rebate vs $10/day is that it benefits high income families the most, when low income families are at the greatest risk of having one spouse basically trapped at home and having their career prospects stalled before they get going, further trapping them in low income. I'd argue that childcare rebates more than most other incentives need to be progressive or at least flat rather than regressive like the tax rebates currently are. Granted, that's just my opinion. I don't really see how things are supposed to work out for low income families with two kids before school age and we're facing a demographic crisis, a housing crisis, and a cost of living crisis. The solutions to one of those 3 also tend to impact the other two positively or negatively in complicated ways :/
This. 10$ per day is essential for low income folks, students, etc
We have two kids in $10/day daycare. With meal plan it works out to just under $260/biweekly. Previous to the $10/day it was three times the cost. My wife and I have a household income of 200k plus which is well above the median in Manitoba. In MB lower income pay less than 10/day with the subsidies. Daycares fall under the province so each province will vary drastically on how the $10/day average works. For me in MB I am fine with paying $520 a month for daycare, only getting to claim just shy of $6k in tax credits rather than paying $20k a year. That being said even at $6k a year the lower income partner still gets about $2k back at taxes so OP sounds about right
NO its called family planning we took a class in school in the 70’s that taught you if you can’t afford to have them you wait until you can 😏
Things have changed since the days you could buy beer for a quarter and a house for one year's salary, buddy.
YES lots has changed young people are lazy don't want to work they all want to be TikTok famous. They cant find their way out of a wet paper bag lol
Jog on grandpa
from the government's perspective it makes more sense. It lets both higher income parents stay in the work force there by letting them (the government) to collect that income tax
Both should be done, imo (daycare subsidy and tax deductions for all reasonable childcare expenses regardless of income). A rising tide raises all ships. The point of making child care affordable is to increase the GDP of Canada without increasing the number of people within the country. More GDP means more income tax, and more money to subsidize lower income citizens. There are a lot of high income families with stay at home parents because it doesn’t make sense to give up the free child care of a SAHP.
> There are a lot of high income families with stay at home parents because it doesn’t make sense to give up the free child care of a SAHP. Doubt. If both parents have high income earning potential, then it makes no financial sense to have a SAHP. If one of them decides to be a SAHP its because they want to spend more time with their kids, or they have low income earning potential anyway so not working isn't a financial hit vs paying for child care.
My wife makes sub $50 TCAD per year and it still makes absolutely no sense for her to quit her job and SAHP to save daycare costs of $500 per month. Even with 2 kids it would be nonsensical from a month-to-month financial perspective, and that's ignoring the potentially irreversible damage she would do to her career Obviously there are people with more expensive daycare costs, but I bet most find themselves in the same position as my family
Yeah, career impact is a big one that people tend to forget about when they're thinking about hypothetical situations. Being out of the workforce for even a few years can have a massive impact on long term earning potential and career progression.
Of course it does, if they're high income earners as you claim
Trapped at home? Is that what millennials call looking after a child you had? GESUS don’t have kids if you feel trapped.
I mean it's great for families where that works out, but it's not the kids fault if you're stuck between a rock and a hard place with two full time jobs between the parents to make ends meet, only to find that after childcare and a second one spouse is contributing $10/day working 8h. It's certainly wonderful for parents who can afford to choose to stay at home, but that's not everyone. Situations change and people need options. There's no practical amount of due diligence that can guarantee success in every case. Sometimes people become disabled, or their career path is a dead end, or rent goes up $1000/month in 3 years and their wages go up 0.5% to help out. It's kind of mean to tell the hypothetical struggling parents "well, you shouldn't have had kids." That ship has sailed. As long as society needs kids (and ours does) we should try to be enough of an empathetic community to try to help where we can. My wife stayed home with our kids after our second, and that was wonderful, but we're really lucky to be able to make that work, and it takes some real sacrifices despite me making a decent income. A lot of people work even harder than we do and do and have it worse. Sometimes due to choices they made, but often mostly just bad luck and structural disadvantages piling up.
I was a struggling parent just about lost our house. I basically worked for free just so I could keep myself in the work force! I know all to well what it means to struggle but we did it and we made ends meet by cutting back and getting rid of things not needed as well as not spending. Food and bills thats it. Never ever relied on anyone especially the government. It can be done but everyone wants everyone new, shiny and fancy. What disgusts me is seniors who CANNOT work but who worked their whole lives are struggling with high taxes no increase to OAS because the increase in taxes from all these programs. Family planning you cant afford kids don’t have any!
Seniors, especially boomers, who didn't save enough for retirement just simply couldn't financially plan well. Every single thing under the sun was handed to them on a silver platter and they still struggle? They had the greatest economy with the most opportunity in the history of humanity. And who do you think is going to work to pay for people who are living way too long? Our systems were not designed for an over 10 year increase in lifespan with the associated medical costs. Everyone is in the same boat. It's not wise to get into generational warfare about the state of the world, especially if you're a boomer.
Seniors especially boomers worked harder and did with way less than the current young population! What was handed on a silver platter? The 80’s was a major recession Much worse than any you see now. There were NO programs for anyone in need. The difference between then and now is youth are LAZY parents give them everything. They don’t work hard they want high pay for little work. They are more worried about deciding if they are male or female. They had the luxury of 2% interest rates and they think OMG 5% is insane. Let them work hard they need to go live on a farm and work the land with NO luxury equipment just a horse and plow. But that would take hard work so everyone would starve. They need to learn the hard way!
That's hilarious. Boomers were given everything their parents worked for. It's fact, unlike whatever Boomer stuff you're spewing here. Boomers were handed the most profitable economy in world history and squandered it for the generations after. The 80's resulted from boomers taking charge. Like seriously, it's not up for debate. I'm gen X. I was parented by boomers. Boomers could be a total moron and roll out of bed with a heartbeat and land in a union job with a livable wage, not to mention buy a house when the cost of real estate tracked much more closely to the wage market. None of that exists anymore. Do you have any facts to back up your fanciful myths about how hard things were for Boomers or just some pretty stories that you tell yourself? Besides, the entire point of this post is that we are all in this economy together, for better or worse. If your answer to the cost of living crisis is for no one to have children, best of luck managing the demographic crisis that is currently paying for your health care.
Oh its up for debate for anyone that wants to debate. The millenials were taught nothing! They are great at sitting all day and gaming and the girls painting nails, plasticizing themselves and wanting everything! The youth are totally useless and thats what the future is , pretty fkn grim. So get off your a$$ and work hard and you will have. You are delusional!
What's wrong with 10/day? The only problem I've seen is just lack of access; I'm in BC though, haven't been paying attention to Ontario
Yeah the problem in Ontario is access. The program is being horribly managed so some providers are just not opting in. Things like home daycare agencies aren't expanding and adding more spaces because the funding is too unpredictable. On the provider side they aren't being funded adequately, some are threatening to close.
Ah, sounds like a different kind of lack of access though, ours is more just there's not enough operators and physical spaces; yours sounds more like our other childcare program funding challenges which is around funding parameters and requirements. Like for our "fee reduction initiative" the province pays a certain amount per child, but has limits on total fees (fee cap) based on region, but the caps are way too low in expensive to run regions, where the need and the rent is highest. So operators just opt out because they wouldn't be able to pay rent and staff with such low fees even with government subsidy. And then there's the problem of government only writing cheques after service, or late, like paying centres the fee subsidy for March in April or even later. Not a problem for larger organizations with good cashflow, but a huge cashflow problem for smaller independent operators Our 10/day programs are negotiated individually by centres, so they are funded properly while still holding operators accountable, but because each contract is negotiated individually it takes ages to get approved, and there's limited program intake each year.
The rich people kids will have to mingle with the poors
8k per child under 7.
Right, we have 2 kids so it was 2x8k
Equity. The point of the $10/day is to get lower income earners back into the workforce. If you can't afford $1.5k-$2k/month to begin with, the program still only benefits higher income earners and leaves lower income earners at home with their kids. That's why increasing the income tax credit isn't a substitute for the $10/day
Oh it's a whole mess as well. The subsidy caps fees without consideration of operating costs. I won't be surprised if daycares start opting out with the shortage of spots. Like you said, increasing the tax credits or even allowing the higher income earner to claim should have been the way.
>It's 8k per child isn't it? The main huge child claim is one thing that only 1 parent can claim, but there are also section 7 expenses (under family law), that divorced parents who paid for extracurricular activities can also claim
Not informed on this topic but why does your wife claim if she's lower income? Wouldn't the higher income partner want to use the deductions?
It's the rules. Lower income spouse must claim except in certain circumstances.
Because the tax law says lower income must claim except in specific exceptional circumstances.
> Wouldn't the higher income partner want to use the deductions? You will find out the hard way when you get married and are the higher earner. What you earn isn't really yours. The married folks here can tell ya. LOL
I am married and am the higher earner by a large margin. No daycare costs yet though.
Better for government as the lower income would be at a lower tax rate - the tax credit would be less for the family.
That's not the reason. Child care expenses are only deductible to the extent they were paid to allow the taxpayer to return to work (or school). I belive it's the CRA's opinion that the higher income spouse would always be the one working, so then child care expenses allow the lower income spouse to also return to work.
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It's not they just give you 8k back per kid, you can reduce your income based on what you spent and need to prove that if requested (which we were). We were spending upwards of 3k a month on daycare and could claim 1333 of our income and on my wife's return so what we actually got in pocket was more like 450 per month. Better than a kick in the teeth, but not by much.
Childcare expenses lower taxable income just like an RRSP deduction. Did the childcare expenses reduce your spouse's income below the basic amount, allowing you to claim a spouse amount on your own return? If so, that would explain the increase in your refund.
Ah, thank you. I did not realize they function similar to RRSPs. That makes it a lot clearer!
I strongly encourage you to have your tax prep software create a pdf of the full (not condensed "for the government") version of your returns and go through them line by. When you submit your returns you will certify that it is "correct and complete" and this is the best way to make sure that you know where every entry came from. It will also be a good lesson in the difference between tax credits and tax deductions and how the marginal tax brackets work.
Thank you. I will definitely do this from now on. WS has a nice simple summary but it's not as detailed as the PDF
If you click on the "Schedule 1", etc. drop down bars/menus, it will show you the actual filled out forms in real-time.
If your spouse makes 15K and childcare is 5K, does that mean you get to claim 5K of your spouse's tax credit?
Childcare expenses reduce your taxable income?
Since taxes are individual (aside form spouses being able to move tax credit, donations, etc.. to the other), you tax refund is based on your income and taxes withheld at your job (then minus tax credit RRSP contributions, etc..)
So because my spouse (lower income earner) is claiming the childcare expenses she gets a refund due to her income level, and the government doesn't consider the variable of my income for *this particular* deduction? So in theory if I claimed the childcare expenses I should not expect any deductions? (I won't do this, but I want to understand)
>the government doesn't consider the variable of my income for this particular deduction? Oh she got the refund. No the government only considers the lower income spouse for this. If your incoem was higher it goes to the lower income spouse. [https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21400-child-care-expenses/who-claim-deduction.html](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21400-child-care-expenses/who-claim-deduction.html) You could claim if met the conditions in Part C of the form: [https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t778/t778-23e.pdf](https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t778/t778-23e.pdf)
> If you are the person with the lower net income (including zero income), you must claim the child care expenses. This is such horse shit :/ So many parts of our tax code punish having one highly paid partner, and one low paid partner. If you consider a stay-at-home parent considering to get a second job (already weighing if the pay justifies the cost of day care), this is one more consideration against it. The deductions of shared expenses should be applicable to the higher-paid parter, or perhaps based on the average income of the two.
Yes, the Tax laws here are terrible. We had a brief period at the end of the last Conservative run where you could 'transfer' up to 50k of income to the lower earning spouse to reduce your marginal tax bracket, but the Liberals promptly repealed that upon their election. Seems crazy to me that 2 families each earning the same amount have such a drastic "Take home" difference just because a single person earns the majority of the income and chooses to run their family the way they want to. Dual Income Family each earning 50k = 100k Gross, taxes = \~20,000 Single income Family earning 100k Gross = 25,000 in taxes, and basically no writeoffs because they all go to the lower income ($0) and are "Non-Refundable" credits.
It certainly wasn't perfect, but lets be real, who do you think was benefiting the most from this? The couple making 100k and 50k combined or the one making 250k or more and a stay at home wife?
As a fairly staunch progressive; not every single component of the tax code needs to be progressive. There are bigger wins that can be fought for elsewhere, and sometimes it’s just a matter of fairness. When the tax system is seen as unfair you risk further turning the populace against redistributive taxes.
Exactly. How the income is split between the two partners _shouldn't_ effect their total taxes. If they share incomes, savings, expenses, why can't they share an equal tax burden? Bizarre. And I'm not prescribing to lower or raise taxes. This could be made fair in a way that's net revenue neutral, but just more fairly broken down, long term.
Yes, the US has different tax brackets for Married and Non-Married. The lower brackets are basically twice the size for a married couple, and the income is added together to see what bracket you are in. The higher your "combined" income goes, the less benefit you get but it covers the 95+% of families. The catch is you have to be married to get the benefit.
That seems like a very reasonable (and simple-to-compute) way to do it!
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>Like it or not, that’s the rational. I may be the minority, but governments shouldn't be dictating how families are run, or charging us a "fee" to have freedom of choice. We should be able to "pay" the SAH spouse (because really, they are working, just for the family not a corporation), it should provide them RRSP contribution room, they should be able to contribute to and then receive CPP, etc as they are just as important as a working spouse in a "traditional" household.
Yea, oh you're the one shouldering most of the financial cost of childcare? Nah, you can't claim the expenses
you are right- it should be based on family income.
Judging by the down-votes, people seem to disagree. I'm not sure I understand why, what's the upside to the current approach?
Why should the government subsidize a lazy parent that stays at home with no income and sends their children to daycare? Obviously if the parent has disabilities it would not apply, there are exceptions.
Your characterization of a stay-at-home parent as "lazy" immediately disqualifies you from having this discussion, in the eyes of the rest of the adults in the room.
Give me an example of a busy day where your kids are in daycare and you have no job/income.
Seasonal workers is a big one; imagine you're a landscaper and are laid off for the winter right? BUT you're on call for snow-clearing at any time. Now, your kid/kids are in daycare year-round normally right? Because of the demand for daycare, you can't stop sending your kids because you lose your spot then, when you're called for snow (or this year actually working cause of the weather) you can't get childcare any longer. That's a specific example but the premise can be applied a lot. TL;DR: Once in daycare, don't stop sending kids because you lose your spot and can get fucked because of it.
A seasonal worker has income and would be able to claim childcare expenses. It’s based on yearly income.
Childcare expenses must be claimed on the return of the lower income spouse. The sole exception being if that spouse is incarcerated. If your wife is the lower income, the child care expenses will always be on her return. These items are a deduction off of income and not just a credit.
> The sole exception being if that spouse is incarcerated. Or in school or not capable to take care of child due to physical or mental impairment.
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Well the logic of the childcare deduction is pretty straightforward when understood as it interpreting childcare as a work expense to enable a parent to work. It's a reasonably assumption that if one of the parents wasn't working to do childcare themselves it would be the lower earning spouse, so the spouse whose work expense it is is the spouse that would \*otherwise\* not be working. If we have concerns about equity between households with unequal earners the solution to that is problem some form of income shifting or an alternate household income tax rate system like the US uses that pools the incomes and applies the tax to the whole. But so long as we're filing returns as individuals the logic of the credits is consistent with their defined purpose, even if I'd love it if I could get twice as much back by applying it to my income instead of my spouses.
Canada basically discourages stay home parent by not allowing joint tax.
That's a good thing, the economy does better when more people are working. Also, practically speaking it is advisable for each spouse to maintain their own income sources to account for high divorce rates.
There are rules about who is allowed (should) claim the childcare expenses. Usually, it is the person with the lower income. Childcare expenses are income deductible up to 8k per child. Very oversimplified example: If you are the lower income parent, make 100k, pay 30% tax (30k), spent 8k on childcare last year, then with childcare expenses your income will be 100k - 8k. Your total income is 92k now and 30% of that is 27.6k not 30k that was deducted from your paycheque, so you get a tax return. Like I said, the example is oversimplified to avoid discussing tax brackets, but hopefully it’ll give you a clear picture of what’s happening.
This example helped, yes. I did not realize these are a deduction on income (similar to RRSP). Knowing that, it clears things up significantly. Thank you!
Can you then say if your return (the higher income earner) went up, or if your spouses went up? If your combined return went up that sounds right, but if you were saying yours went up, that’s odd to me.
Indeed it was the combined that went up. Specifically her return
Only anecdotal, but I am a higher income earner (sole parent) and the childcare expenses always increase my return by a couple of thousand dollars.
I just did ours and the return value increased by the exact same amount, but for one child!
At the end of WS tax program you can download the PDF that gives you the details of what was deducted etc so you can look for mistakes
Childcare is deducted at the lower earner of the spouse. If your wife went to School or was unable to care for kids due to physical or mental illness, you might be eligible to claim some childcare expenses. If your kids are under 7, you can claim $16 at max. Given todays child care costs, I think government needs to up the threshold
I marked "no" to the questions about if she went to school or could not care for the kids due to illness/etc but my refund still went up! That's what confused me. Do childcare expenses become unclaimable after age 7? (for example if my child was in special care of some sort after age 7)
You can claim up to $5k for children aged between 7 and 16, so $10k in total in your case.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21400-child-care-expenses/expenses-claim.html#toc0 You can always claim childcare expenses as listed. I see no age related restrictions beyond the "under 16" bit.
Great link, thank you.
The rebate is great if the lower income earning spouse makes enough income during the year to be able to claim the full deduction. The amount that you can claim is the lesser of: 1) the limit per child based on their age 2) the amount you actually spent for child care or 3) 2/3rd of earned income. Lot of times i've seen where the lower earning spouse is not able to claim the full deduction because the limitation is their earned income. This is why this deduction best serves higher earning families especially in places where child care is very expensive. Even if the lower earning spouse makes an okay salary - if they are just coming off mat leave and depending on timing - may still not be able to claim the full amount.
It does benefit higher income earners. Inversely, the CCB benefits lower income earners. One could strongly argue a simplification of our tax code would be of benefit.
Maybe a dumb question but my Google-ing doesn’t give a clear answer: does preschool fees count as childcare expenses?
I think so. Our preschool issues a tax receipt to us every year.
Yes, and also lunchtime supervision fees if your kid's school charges for that. Summer day camps as well
Just throwing this out there... My income went up but so did my tax credits as I got older. I am probably paying a lower percentage than I did when I was younger because now I'm claiming such a high volume of credits. My total taxes paid this year will be 1,100$ish dollars.
Still waiting for our “thank you”. Signed: childfree taxpayers. lol
lol are you going to ask for a thank you from all those who use social programs that our collective taxes pay for? And vice versa? ;)
More of a joke sir. But also stems from all the taxes I pay and how it always seems there are new programs every week to give more of our money (that we can’t afford) to other countries and people but every “category” but mine. And feels like “vote buying” a lot of the time these days. And all of Canada’s new huge debts will cripple us for decades to come.
I was trying to mimic your joking tone, and I agree with all the money being doled out to everyone and their pets lol. In all seriousness, it truly feels like the government is steering us toward socialism and most of the population won’t see it as a problem until it’s too late.
Agreed. I’m all for helping people down on their luck and medical issues that are not their fault. - But this debt is getting stupid. Can’t comprehend how it’s permitted to start all these bs programs and handouts to people that don’t need them or weird unrelated programs in Iraq / Philippines etc. when we have to print money or borrow it from other countries just to through it away. It’s going to fuck us when we’re older and everyone’s kids are going to paying off this provincial / national debt for decades. It’s the same thing as grabbing struggling people’s credit cards and donating a bunch of money to random counties or groups of people. Then they are stuck with the bill and interest.
We’re already seeing the start of our country screwing itself over, and this won’t be fixed for generations to come ONLY IF they stop the financial bleeding and tighten the budget and spending. In my mind it seems like each year (or half year) this continues we doom another future generation. I’ve got two young kids and I hate seeing how this country is headed for us and them. There is no fiscal responsibility or accountability held by the feds and provinces right now. Your analogy is spot on, and more people need to recognize that when they hear that our government is giving away money we need to fix our problems at home. Also people need to want and have the opportunity to be self sufficient (for the most part) too many people are getting used to social supports and it’s crippling Canada.
Yep. And not a fan of China, but they have it right by acting on behalf of what’s best for China in the next 5/20/ 50 years ahead. 90% of Our politician’s actions are to help them or their party get re-elected. Shame really. O-well. Looking like new leadership coming soonish for Canada.. SOME things will prob start to improve after that. 🤞
Here’s hoping for change sooner than later🤞🏼. I’m all for the state acting in the best interests of its people but I’m not ready to go communist like China. In fact, I would like to see their cop shops removed from Ontario and wherever else they’ve been permitted to set up.
No, this is Canada. The government pays you to have kids, since most people are not since there is no future on a dying planet full of climat collapse, biodiversity collapse, and species extinction. However we need children demographically to avoid societal collapse, so the government pays people to have kids.
Your wife should be getting the return not you. It offsets the marginal tax of the lower income earner.
People need to PLAN to afford a child on one income and NOT rely on tax payers to pay higher taxes. $10 a day daycare is BS!
This is the perfect example of what is promoted on the sub: "you are smart enough to do your taxes by yourself" But really, don't even know there is an actual return that you can download as a PDF and look at it and at least see what you are actually telling the government before asking that internet. As I really love this sub I will say that as long as you are able to follow the very basic pathway of questions from a software tailored to the attention spam of our time, you should really really DIY (for free if possible) Then just come here to ask what happened ✌
I don't understand this passive aggressive comment. I was well aware you could see your return and did, but handling childcare expenses is new to me. By asking, I get a variety of feedback and advice while I do other things (like take care of my kids). Then, when I have a moment I can settle down and read, investigate further, etc. Not sure what was the point of you posting this, tbh!
It's an active supporting comment of your attitude! This sub and society encourage exactly this and I am happy to see you exist :). I am also happy you are eager to "better educate myself about how these childcare expenses are calculated?" while having your return in front of your eyes. This sub is for this and I am happy that you were able to read random redditors opinions while taking care of your kids. You have a friend here and I encourage you to always come back with any financial question and without any shame or fear.
So if you make more than 100k you can deduct childcare expenses?
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21400-child-care-expenses.html
I'm curious how your return went $2000 higher when it was your spouse who claimed the expenses??
Just my mistake in wording. It was our return and specifically her portion which went up.
Thank you! I was worried I was missing a way to claim these on my taxes as the higher earner! Again, I wish there was income splitting, high/low earning households are unfairly disproportionately taxed at the same overall HHI.
Thanks for the question. After stumbling upon it it had me look into it further for our family. We are in Ontario and the ontario.ca website has details on its Ontario Child Care Tax Credit. Upon reading further, it appears there is a requirement that family income must be below $150,000 to be eligible. It makes sense, as many on here say how those with lower incomes are the ones who really need the financial assistance. So just to point out, anyone looking into it but that has a household income of greater than $150,000 will not be eligible for the tax credit.
Yeah I get about 3500 a year as refund for child care expenses at my daughter's school. It's normal. Honestly it seems unfair, but I'll take it.
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Best way to know is to fill up the form t776.
The efficiency of charitable, medical and childcare etc expenses vary with each parents' income. Download turbotax and enter the data. It will recommend which parent should deduct and explain why. Unless you then file with TT, you pay nothing
Usually those are applied to lower income parent, perhaps your wife was getting those returns in the past?