Claiming Child Care on Your Taxes: Line 21400 and Ontario’s CARE Credit

You can deduct what you paid for daycare, home child care, day camps and before- and after-school care on line 21400 of your tax return, using Form T778. The deduction is the smallest of three amounts: what you actually paid, a yearly limit for each child ($8,000 under age 7, $5,000 for ages 7 to 16, $11,000 for a child eligible for the disability tax credit), and two-thirds of the claiming parent’s earned income. In a two-parent home the parent with the lower net income usually claims it. Ontario families with a family income of $150,000 or less can also get the Ontario Child Care Tax Credit (CARE), worth up to 75% of the deduction.

Which year’s figures are these? As of November 2026, the newest Form T778 on the CRA’s site is the 2025 version. The 2026 form, for the return you file in spring 2027, isn’t out yet. The per-child limits have been the same since the 2015 tax year, and Finance Canada’s 2026 report on federal tax expenditures gives the same amounts. Check the 2026 Form T778 once the CRA publishes it.

How much child care can I deduct?

Your deduction is the lowest of these three amounts:

1. What you actually paid for eligible child care provided in the year.
2. The yearly limits for all your eligible children, added together (table below).
3. Two-thirds of the claiming parent’s earned income.

Earned income is mainly employment income and net self-employment income (a loss doesn’t count), plus a few others such as the taxable part of scholarships and research grants and CPP or QPP disability benefits. EI maternity and parental benefits are not on the list: a temporary federal rule let EI count only for the 2020 and 2021 tax years. So if the lower-earning parent was on parental leave for most of the year, the two-thirds cap can shrink the claim a lot. For example, a parent who went back to work in October and earned $9,000 by December can deduct at most $6,000, even if daycare cost more.

Only care provided in the tax year counts, and you can’t carry unused amounts forward to another year.

Which parent claims the deduction?

• You’re the only person supporting the child: you claim.

• You live with a spouse or common-law partner: the one with the lower net income claims, even if that income is zero. If your net incomes are exactly equal, you have to agree on which of you claims.

• The higher-income partner can claim only in specific situations. The lower-income partner has to have been:

  • enrolled in an eligible educational program;
  • unable to care for children because of a physical or mental impairment, as certified by a doctor, and either confined to a bed or wheelchair or in a hospital or similar institution for at least two weeks in the year, or likely to stay unable for a long, indefinite time;
  • in a prison or similar institution for at least two weeks in the year; or
  • living separate and apart from you at the end of the year because your relationship broke down, for at least 90 days that began in the year, and you got back together within 60 days after the year ended.

  Even then, the higher-income partner works out a limited claim in Part C or Part D of Form T778, based on the weeks (or, for part-time study, the months) the situation lasted. That partner calculates first, and the two of you can each claim part of the expenses.

If you separated and didn’t get back together within 60 days after the year ended, your former partner doesn’t count as a person supporting the child for that year. Each of you can claim only what you paid for care while the child lived with you, as if you were the only person supporting the child, under the normal limits.

One result surprises people: if the lower-income parent had no earned income and none of those situations applied, two-thirds of zero is zero, so neither parent can claim. If your situation is unusual, read the CRA’s Determine who can claim the deduction page or call the CRA’s individual tax enquiries line at 1-800-959-8281.

What child care expenses count?

The care has to let you or your partner work, run a business, go to school in an eligible educational program or do research under a grant. The child has to be under 16 at some point in the year, or depend on you because of a physical or mental infirmity, and has to have lived with you when the care was provided. Payments that qualify include:

• Daycare centres and day nursery schools. That includes centres in the Canada-wide early learning and child care (CWELCC) system.
• Caregivers such as home child care providers, babysitters and nannies.
• Before- and after-school care. When a school runs it, only the child care part of the fees counts: supervision before and after classes or over lunch.
• Day camps and day sports schools whose main purpose is caring for children, such as summer or March break day camps.
• Overnight camps, boarding schools and overnight sports schools, but only up to the weekly amounts in the table above.

The care generally has to be provided in Canada by a Canadian resident. There are exceptions, so check the CRA’s Who is eligible page if care was outside Canada.

What doesn’t count?

• Medical or hospital care, clothing and transportation.
• School tuition for a regular program or a sports study program.
• Lessons and recreation, such as tennis lessons.
• Payments to the child’s parent, or to your spouse or partner if you’re the child’s parent.
• Payments to someone for whom you or another person claimed an amount on line 30400, 30425, 30450 or 30500 of the return (for example, the amount for an eligible dependant).
• Payments to a person under 18 who is related to you. The CRA’s own example: you can’t claim what you paid your 14-year-old to look after her little brother over the summer.
• Costs that were reimbursed or covered by financial assistance, unless that money is included in your income.

I pay reduced CWELCC fees. What do I claim?

You claim what you actually paid. In Ontario you don’t apply for the CWELCC fee reduction: a program enrolled in CWELCC charges the reduced fee, which as of November 2026 is capped at $22 a day for an eligible child. So your receipts show the lower fee, and that’s what goes on Form T778. Our guide to Ontario’s $10-a-day child care explains those fees.

In Alberta, the province’s affordability funding goes to the program and lowers the fee it charges you. As of November 2026, the flat parent fee for a child up to kindergarten age at a funded daycare or family day home is $326.25 a month for full-time care; a full year at that fee is $3,915. See Alberta child care fees for the details.

The CRA doesn’t allow a claim for costs covered by financial assistance. So if a fee subsidy pays part of your bill (from your service system manager in Ontario, or Alberta’s Child Care Subsidy Program, which pays the provider on your behalf), you claim only the part you paid yourself. If your employer paid for child care and that amount is included in your income, you can claim the part that’s included.

Lower fees mean a smaller deduction and, in Ontario, a smaller CARE credit, because both are worked out from what you paid.

What receipts do I need?

• Get a receipt from the centre, camp or caregiver showing the services and what you paid. If an individual looked after your child, the receipt must show their social insurance number.
• The receipt can be in your name or your spouse’s or partner’s name.
• Don’t send receipts with your return. Keep them in case the CRA asks to see them. Ontario also says to keep them for the CARE credit.

What is Ontario’s CARE tax credit?

The Ontario Child Care Tax Credit is also called the Ontario Childcare Access and Relief from Expenses (CARE) tax credit. It’s a refundable credit, so you can get it even if you owe no tax. To claim it, you must:

• be eligible for the Child Care Expense Deduction (line 21400);
• have a family income of $150,000 or less;
• live in Ontario at the end of the tax year.

As of November 2026, Ontario says the credit continues alongside CWELCC. Any expense that counts for the federal deduction also counts for CARE.

How it’s worked out: your Child Care Expense Deduction, multiplied by a rate based on your family income. Ontario defines family income as the incomes of the family members used in working out your Child Care Expense Deduction. It isn’t your pay before tax: Schedule ON479-A starts from your and your partner’s net incomes (line 23600 of each return) and adjusts them, so use the schedule’s figure in the table below.

Ontario’s own example: a family income of $45,500 gets a 55% rate. The rate falls quickly at higher incomes; at $150,000 it works out to 1%.

The most you can get is $6,000 per child under 7, $3,750 per child aged 7 to 16 and $8,250 per child with a severe disability. That’s 75% of each federal limit. Bigger amounts you may see online included a 20% top-up that applied to the 2021 tax year only.

A worked example

Here’s a made-up Ontario family. They have a 3-year-old in a CWELCC daycare and paid $5,000 in fees in 2026. The lower-earning parent had $40,000 of employment income. Their family income, as Schedule ON479-A works it out, is $95,000.

The deduction also lowers the lower-earning parent’s taxable income by $5,000. What that saves depends on their tax bracket.

How do I claim it?

1. Collect your receipts for all the care provided in 2026.
2. Fill in Form T778. If you file on paper, attach the completed T778 to your return (but not your receipts). If you file online, keep the form and your receipts with your records.
3. The deduction goes on line 21400.
4. In Ontario, also fill in Schedule ON479-A and carry the credit to Form ON479, Ontario Credits, on the same return as the line 21400 claim.
5. File on time. For most people, 2026 returns are due April 30, 2027. If you’re self-employed, check the CRA’s filing due dates.

The CRA explains each step on its How to claim page, and Ontario on its Child Care Tax Credit page. Related reading: What Is Canada Child Benefit? and Ontario Child Benefit. Still looking for care? Browse licensed programs on our Ontario child care and Alberta child care pages.

Sources

• Ontario, Ontario Child Care Tax Credit (updated January 27, 2026): the CARE name, refundable credit, who qualifies, the $150,000 family income limit, how family income is defined, the rate table and its $45,500 example, the maximums per child, the 2021-only top-up, eligible and ineligible expenses, Schedule ON479-A, keeping receipts and the CRA enquiries line.
• Ontario, Canada-Ontario early learning and child care agreement (updated October 23, 2026): the CARE credit continues; the $22-a-day cap; no application needed for the CWELCC fee reduction; fee subsidy depends on family income.
• Ontario, Filing your personal income tax return: the April 30 filing deadline for most people, Form ON479 and what a refundable credit is.
• Alberta, Childcare fees: affordability funding lowers the fees programs charge, and the $326.25 monthly flat fee for full-time care.
• Alberta, Child Care Subsidy Program: subsidy is paid to the childcare provider on the family’s behalf.
• CRA, Who is eligible (line 21400): the reasons care must be needed, the eligible child, the child living with you, and care provided in Canada.
• CRA, Expenses you can claim: what counts and what doesn’t, payments to people claimed on lines 30400 to 30500, related people under 18 and the 14-year-old example.
• CRA, Determine who can claim the deduction: the lower-income rule, zero and equal incomes, the situations in which the higher-income partner can claim, and splitting the claim.
• CRA, How to claim: Form T778 and line 21400, receipts and the caregiver’s SIN, not sending receipts, services in the year and no carry-forward.
• CRA, Form T778, Child Care Expenses Deduction and the 2024 Form T778: the yearly and weekly limits, the earned income definition, Parts C and D (the higher-income situations and school attendance), and the rules on reimbursements and employer-paid child care.
• CRA, Income Tax Folio S1-F3-C1, Child Care Expense Deduction and its chapter history: only the child care part of school fees counts, the separation and 60-day rules, and the limits in force since 2015.
• Finance Canada, Report on Federal Tax Expenditures 2026, part 9: the $8,000, $5,000 and $11,000 limits and the lowest-of-three rule.
• Finance Canada, Draft legislative proposals on deductions for Employment Insurance and COVID-19 benefits (January 2021): the temporary rule counting EI benefits as earned income for 2020 and 2021 only.
• CRA, Ontario tax information for 2025 and Schedule ON479-A: CARE eligibility (a line 21400 claim, Ontario resident at the end of the year), net income from line 23600 as the starting point, and carrying the credit to Form ON479.

Last checked: November 11, 2026.