11 February 2002 Internal T.I. 2002-0121787 - CHILD CARE EXPENSES-STRIKE

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues: Whether child care expenses incurred during a strike period can be deducted.

Position: Generally yes, if related to a temporary strike.

Reasons: The expenses must be incurred to enable the taxpayer or the supporting person of the child to perform the duties of the office or employment. Extenuating factors may cause a supporting person not to be physically present at the work place for a limited period of time.

		February 11, 2002

Ms. Kim Schau	HEADQUARTERS
	Calgary TSO	Patrick Massicotte
	Client Services Division	(613)  957-9232

2002-012178

Child care expenses

This is in reply to your letter faxed to us on February 5, 2002 regarding the deductibility of child care expenses under subsection 63(1) of the Income Tax Act ("Act"). More specifically, you request whether the cost to an individual of child care services provided during a period where the individual is on strike may be considered child care expenses for the purposes of subsection 63(3) of the Act.

Our Comments

Subsection 63(3) of the Act defines the expression "child care expense" to mean "an expense incurred in a taxation year for the purpose of providing in Canada, for an eligible child of a taxpayer, child care services including baby sitting services, day nursery services or services provided at a boarding school or camp if the services were provided

(a) to enable the taxpayer, or the supporting person of the child for the year, who resided with the child at the time the expense was incurred,

(i) to perform the duties of an office or employment,
(ii) [...]"

We have reviewed these provisions as well as the court decisions that relate to them. Although no clear principles can be drawn, there may be times when extenuating circumstances cause an individual to be physically absent, for a temporary period of time, from the work place and child care services nonetheless qualify for a deduction under section 63 of the Act. Whether such extenuating circumstances exist is a question of fact, however, in our view, a temporary work stoppage due to a labour dispute would qualify as such.

We trust that these comments will be of assistance to you.

For your information a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Legislation Access Database (LAD) on the Canada Customs and Revenue Agency's mainframe computer. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure, including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the LAD version, or they may request a copy severed using the Privacy Act criteria, which does not remove client identity. Requests for this latter version should be made by you to Mrs. Jackie Page at (819) 994-2898.

Milled Azzi, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch

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