Child tax credits for parents
Parenthood may have its rewards, but saving money isn’t usually one of them. From stocking up on diapers to shelling out for the senior prom, the cost of raising a child to age 18 in Canada is significant.
Similarly, the cost of childcare can be daunting. Childcare costs vary depending on the child’s age and where you live – for example, in Ontario childcare costs may range between $6,500 and $9,500 per year.
However, claiming childcare expenses can benefit your tax return according to Christine Van Cauwenberghe, tax and financial planning expert with Investors Group. For example, parents are entitled to claim up to $175 for children ages six and under, $100 for children aged seven to 16 and $250 for children with a disability.
Many parents make the mistake of not claiming the maximum amount of eligible expenses. That would be an opportunity lost, as childcare amounts cannot be carried forward to future years.
Contact your financial planner to provide tips on how to maximize your child care expenses including:
- Which spouse can claim the expense
- The importance of listing all children under 16 as dependents
- Claiming summer childcare expenses such as day camp
- Which extra-curricular activities are tax-eligible