Child care deduction — daycare, camp, and babysitter costs
Child care expenses
Section 63 allows a deduction for child care expenses (daycare, after-school care, day camps, babysitters) paid to allow you or your spouse to work, carry on a business, or attend school.
Plain-language explanation
Section 63 provides a deduction for child care costs — one of the few family-related deductions (as opposed to credits) in the Canadian tax system. Being a deduction (not a credit), it reduces income dollar for dollar, saving tax at your marginal rate.
Who claims it: The child care deduction must be claimed by the lower-income spouse (or the person with the lower net income). The higher earner can only claim it in specific circumstances — e.g., if the lower earner is a full-time student, in jail, or mentally/physically infirm.
Qualifying child care expenses: - Daycare and nursery schools - After-school programs (when a parent or guardian is at work) - Day camps (but not overnight camps) - Boarding schools (limited amounts) - Babysitters and nannies (receipts required; if paid cash, both parties must report)
2026 limits per child: - Children under 7: up to $8,000 - Children aged 7–16: up to $5,000 - Children with a disability (eligible for DTC): additional $11,000 (max $16,000)
The deduction limit: The deduction is also limited to 2/3 of your earned income (employment or self-employment). This prevents claiming the deduction against investment income alone.
Example
Pat earns $65,000 and their spouse earns $40,000. They pay $12,000 for daycare for their 3-year-old. The lower-income spouse (earning $40,000) claims the deduction — limited to the lower of: $8,000 (per-child limit for under-7), $12,000 (actual expenses), or 2/3 × $40,000 = $26,667. Deduction: $8,000.
Amendment history
Significant changes to this provision. Older versions help you understand rules that applied in prior tax years.
2021 budget temporarily increased the child care expense limits to $8,000 (under 7), $5,000 (7–16), and $11,000 (disability) — amounts previously at $8,000/$5,000/$11,000. The 2021 budget also proposed a new Canada-wide early learning and child care plan targeting $10/day daycare.
Before
$8,000 for under-7 / $5,000 for 7–16 / $11,000 disability supplement
After
Same limits maintained; confirmed by indexed to inflation per CRA
Common questions
Can the higher-earning spouse claim the child care deduction? +
Only in specific circumstances: if the lower-earning spouse was a full-time student, in prison, hospitalized or in a care facility, or separated during the year. In all other cases, only the lower-income spouse can claim s.63.
Do I need receipts for babysitter costs? +
Yes. You need the name, address, and SIN of the person who provided care. If you paid cash to a babysitter, they are required to report that income. CRA will ask for documentation, and payments to family members under 18 are not deductible.
Is overnight summer camp deductible? +
No, not overnight camps. Day camps are fully deductible; overnight or "sleep-away" camps are limited to $275/week per child (for under-7) or $200/week (for 7–16), as boarding school equivalents.
Key terms
Related sections
Related calculators
Source: Income Tax Act, RSC 1985, c. 1 (5th Supp.), section 63. — Read the official text on Justice Canada
These summaries are for educational purposes only and do not constitute legal or tax advice. Speak with a CPA for advice on your specific situation.