Asked
This seems like a question I should be able to answer myself, but I'm finding it confusing. How do childcare tax deductions work? Is there a maximum amount? I'm looking at employing a full time nanny for my gaggle of children and it's pretty expensive, but it's tax deductible... I just don't understand how that works.
Clint’s answer
There are quite a few answers one could give based on the question, "how does it work?" For any topic. I'll try to cover your specifics. Yes there is a max depending on the age, and if the child has a disability ($5,000 for children over 6, $8,000 for children under 6, and $11,000 for children with a disability). You must be working or studying while care is paid for, and if the care is being provided in your home you may have to pay CPP and EI as you could be considered an employer. Also, whoever you pay to care for your children is supposed to be a Canadian resident.
Update, October 2026: The age cut-off is 7, not 6. The yearly limit is $8,000 for a child under 7 at the end of the year, $5,000 for an older eligible child, and $11,000 for a child who qualifies for the disability tax credit.
From Ask Clint: real questions from a Canadian public finance forum, answered by Clint Cole. Names are changed. This is general information, not advice for your situation, and rules and dollar figures may have changed since Clint answered. Terms