Section 63

Subsection 63(1) - Child care expenses


Symes v. Canada, 94 DTC 6001, [1993] 4 S.C.R. 695, [1994] 1 CTC 40

Because the purpose for which the taxpayer incurred her child care expenses came squarely within the definition of "child care expenses" in s. 63(3), she was precluded from deducting such expenses in accordance with the more general rules governing deductibility in ss.9 and 18(1)(a).

See Also

Allott v. The Queen, 2010 DTC 1382 [at 4521], 2010 TCC 232 (Informal Procedure)

The taxpayers were permitted to deduct babysitting expenses despite being unable to obtain a receipt from the teenage babysitter. The filing of receipts was "directory" rather than "mandatory."

Deputy Minister of Revenue for Quebec v. Letarte, 97 DTC 5515 (Queb. C.A.)

The taxpayer was entitled to present evidence that she had paid $8,660 in child care expenses in the year notwithstanding that she had receipts from the caregiver for only $4,000 and that Article 353 of the Taxation Act (Quebec) provided that no deduction could be taken in the absence of the provision of such receipts.

Bailey v. MNR (1980), 1 C.H.R.R. 193 (C.H.R.T.)

The former s. 63 was discriminatory because it excluded men from the benefit of the deduction, unless they were unmarried, separated or had a wife who was incapable of caring for the children because of an infirmity or confinement to prison.

Administrative Policy

23 October 2015 External T.I. 2015-0614231E5 F - Frais de garde subventionnés

additional Quebec child care contribution is deductible in the care year rather than the subsequent return-filing year (assuming timely payment to ARQ)

Under the amended Quebec regime for subsidized child care, there is a core contribution of $7.30 per day, per child, which is paid directly for child care, and an additional contribution scaled to family income (of up to $12.70 per day, per child), which is payable to the ARQ when filing income tax returns for 2015 (in the spring of 2016). If the additional contribution is deductible, in what year may it be deducted? For example, would the additional contribution paid in the spring of 2016 in respect of care received in 2015 be deductible in 2015 or 2016? CRA responded:

Child care expenses are deductible provided that inter alia they are in respect of child care expenses incurred for services rendered during the year. Therefore, an Additional Contribution that meets all the requirements for deductibility under subsection 63(1)… as a child care expense may be deducted in computing the taxpayer's income in 2015 if the subsidized child care services were rendered during 2015, even if the calculation of the Additional Contribution is made when the individual's Québec income tax return for 2015 is completed in 2016.

Furthermore…they must be "paid". The CRA will consider that this condition is satisfied at the time of filing of the federal income tax return for 2015 if the additional contribution is paid to the Quebec Minister of Revenue by the due date applicable for that year. [T]he due date is defined in section 88.1 of the Educational Childcare Act….


Debra Gordon, "Child-Care Deduction", 1999 Canadian Tax Journal, No. 6, p. 1588.

Paragraph 63(1)(d)

Administrative Policy

22 October 2012 Internal T.I. 2012-0459681I7 F - Hiring Credit for Small Business and CCE deduction

HCSB credit reduces babysitting expense re EI premiums

Taxpayers who earn employment income rather than business income hire home babysitters as employees and receive hiring credit for small business (HCSB) by way of credit to their source deduction accounts. CRA stated:

[T]he employer's EI premiums are "child care expenses" within the meaning of subsection 63(3) that can be taken into account. in computing the deduction under subsection 63(1). Under paragraph 63(1)(d), the portion of the employer's contribution for which the employer is entitled to the HCSB is an amount in respect of which an individual is entitled to a refund that cannot be taken into account in the calculation of deductible child care expenses.

21 August 2014 Internal T.I. 2014-0542121I7 - Payments from the province of BC

parent compensation for teachers' strike

The proposed Temporary Parental Educational Support payments would be provided by the B.C. government to parents of children in kindergarten through grade seven in the public school system in the event that a labour dispute with teachers was not resolved. The payment would be $40 per day per eligible child to help offset the cost of tutoring, child care or supervision. CRA stated:

If the Payments provided are a reimbursement of, or specific assistance for child care expenses, it is likely that paragraph 63(1)(d) would apply and the Payments would reduce the child care expense deduction otherwise available. If the Payments are made based on a child's grade level, with no requirement for a child care expense to be incurred by the recipients, the Payments will likely not be "a reimbursement or any other form of assistance" in respect of child care expenses, and the available child care expense deduction would not be reduced.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business parent compensation for teachers' strike 98

Subsection 63(2) - Income exceeding income of supporting person

See Also

George v. The Queen, 2010 DTC 1341 [at 4307], 2010 TCC 496 (Informal Procedure)

The taxpayer, who earned more than his spouse, could not deduct from income $10,000 of childcare expenses under s. 63. Woods J. at para. 8: "The appellant seeks an interpretation of section 63 which provides greater financial relief to families who care for severely disabled children. That may be desirable from a policy perspective, but it is not provided for in section 63."

The Queen v. McLaren, 90 DTC 6566, [1990] 2 CTC 429 (FCTD)

"income" imports positive income

The word "income" in s. 63(2) require the existence of a positive sum. Consequently, where the supporting person had no income, s. 63(2) did not apply.

Words and Phrases

Administrative Policy

13 October 2009 External T.I. 2009-0342091E5 F - Revenu d'emploi exonéré par Conv.- frais de garde

child care expenses could only be claimed by the spouse with the lower net income, notwithstanding that her income was Treaty-exempt

The wife of a couple, both of whom were Canadian residents, was a French national who received a salary that was exempt under Art. XIX, para. 1 of the Convention with France. CRA indicated that, with her net income being lower than his, he could not claim child care expenses as “only the spouse or common-law partner with the lowest net worldwide income (including nil income) can generally deduct these expenses.”

Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 19 employment income that was Treaty-exempt was to be reported (on a separate line), with the s. 110(1)(f)(i) deduction then claimed 202

Paragraph 63(2)(b)

Element C

Subparagraph (i)

Clause (i)(B)

Subclause (i)(B)(I)

Administrative Policy

7 April 2005 Internal T.I. 2005-0110991I7 F - Frais de garde d'enfants

“period of not less than 2 weeks” refers to 2 consecutive weeks

Regarding the interpretation of the phrase "throughout a period of not less than 2 weeks in the year" in ss. (i)(B)(I) and (i)(C) of C in s. 63(2)(b), CRA stated:

[T]he phrase "throughout a period of not less than 2 weeks in the year” in subclause (i)(B)(I) and subclause (i)(C) of the description of C in paragraph 63(2)(b) of the Act refers to two consecutive weeks.

Indeed, although the word "consecutive" is not present in the wording of the parts of that provision of the Act referred to above, we interpret the word "period" to mean a continuous and uninterrupted period of time.

Words and Phrases

Subsection 63(3) - Definitions

Child Care Expense


Fannon v. Canada Revenue Agency, 2012 DTC 5130 [at 7247], 2012 FC 876, aff'd 2013 DTC 5088 [at 5975], 2013 FCA 99

The taxpayer's son did not reside with him when he incurred expenses in caring for his son, and therefore the expenses were not "child care expenses" under s. 63(3). Near J. confirmed that s. 63(3) is not discriminatory under the Charter, as it does not perpetuate a disadvantage by perpetuation of prejudice or stereotypes. The mere deprivation of a financial benefit that would be available to parents with custody of their children is not enough to establish discrimination against parents without custody.

Locations of other summaries Wordcount
Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Subsection 15(1) non-custody parents not stereotyped 84

See Also

Kwan v. The Queen, 2018 TCC 184 (Informal Procedure)

after-school activities with an educational component qualified

The taxpayer and his spouse both worked full time and had two children, 10 and 12, who attended school on a full-time basis, ending at 3:00 pm. The Minister disallowed the taxpayer's claims of approximately $5,000 for child care expenses in his 2016 taxation year that were incurred on after-school activities (including chess programs, math tutoring classes, Chinese language classes and students hired to mind the two children), a week of camp and ski classes, on the basis that they did not qualify for “child care expenses” within the meaning of s. 63(3).

In allowing most of the expenses, Pizzitelli J stated (at paras 11 and 13):

[T]he purpose of the legislation is to assist parents who work by subsidizing child care expenses … .

...Given that goal, it is difficult to accept the Minister's conclusion that any expense related to looking after the child of a working parent should be denied solely because it included an educative element. Such an interpretation would clearly undermine the intent of the Parliament … .

He further quoted approvingly (at para. 13) the statement in Jones that “similar considerations should apply to recreational activities.”

After noting that bilingual university students charged $5 more per hour than high school students, and in rejecting (at para. 19) a Crown submission that “higher hourly expenses for class instructors or student minders should not be allowed if opportunity exists for incurring lower costs” he adopted the statement in Lessard (2003 TCC 266, at para. 12) that:

…The taxpayer is responsible for choosing…the child care services he or she wishes to use; the taxpayer makes this choice on the basis of the child's needs, and this choice is an exercise of parental discretion.

However, Pizzitelli J reduced (at paras 22 and 23) the claimed camp expenses by applying the 1/40th limitation in 63(3)(c), and disallowed in full a Saturday chess tournament and a program for full-day skiing on Fridays (i.e., during school hours).

Jones v. The Queen, 2006 DTC 3531, 2006 TCC 501 (Informal Procedure)

after-school gym class qualified

Woods J. accepted the taxpayer's evidence that she decided to enrol her twelve year old daughter in an after-school gym class to accommodate the taxpayer's employment duties. Accordingly, the fees qualified under s. 63.

McLelan v. The Queen, 95 DTC 856, [1995] 1 CTC 2673 (TCC)

The taxpayer was able to deduct the cost of a nanny for the period of approximately two months prior to her return to work given that, among other things, "owing to market conditions relative to securing a good nanny, especially in her residential area, she felt that it was the most prudent thing to do to hire the nanny in question as soon as the nanny was available" (at p. 859).

D'Amours v. MNR, 90 DTC 1827, [1990] 2 CTC 2355 (TCC)

At a time that the taxpayer was on maternity leave but was still entitled to receive salary from her employer in an amount, which in combination with unemployment and insurance, resulted in her receiving 95% of her previous salary, she continued to pay the fees of a regular babysitter, which were held to be deductible.

Administrative Policy

14 June 2012 External T.I. 2011-0428341E5 F - Crédit activités physiques, activités artistiques

expenses that qualified for the child fitness or children's arts tax credit potentially could qualify as child care expenses

In the course of a general description of the child fitness tax credit (CFTC) and the children's arts tax credit (CATC), CRA stated:

Where an organization concludes that the program it offers qualifies for either the CFTC or the CATC while being a child care expense within the meaning of subsection 63(3), it should issue a single receipt containing the all the information relevant to the various tax measures. Depending on the taxpayer’s situation, the taxpayer will use the receipt either for child care expenses, or for the CFTC or the CATC.

4 April 2013 External T.I. 2012-0444581E5 F - Frais de garde - hébergement en famille d'accueil

sport school camp expenses do not include accommodation expenses paid to a host family

A taxpayer, whose child was selected to join an elite hockey team that is linked to a distant school agreed with a host family in that area to provide lodging to the child during the school year. Are these accommodation expenses eligible as child care expenses? CRA responded:

[A]mounts paid to a boarding school or camp include amounts paid to a sports school where lodging is involved.

However … lodging expenses with a host family are not amounts paid to a sports school providing lodging services, and, consequently, they are not child care expenses for the purposes of subsection 63(3).

31 August 2005 External T.I. 2005-0114421E5 F - Frais de garde d'enfants

fees for breach of contract can qualify but not educational fees

CRA commented on whether the following categories of expenses incurred by parents at a childcare centre qualified as child care expense:

fees paid for child care services yes
additional fees paid for child care services generally yes – “fees for additional child care (where the parent picks up the child after official daycare hours) are child care expenses … provided they satisfy the other requirements of that section”
outings outside the daycare no – “the purpose of those activities is not to look after the children in order to protect them and thus enable the parents to earn employment income … [but instead] is to ensure the development of the children's physical, social and artistic skills”
classes and activities given at the daycare; no – “the primary purpose of those courses and activities is not to provide childcare but rather to promote the cultural, physical and artistic development of the children.”
fees incurred for breach of contract generally, yes – “2003-0183697 … [indicated] that the phrase ‘an expense incurred...for the purpose of providing… child care services’ found in subsection 63(3) was broad enough to include expenses incurred for the breach of a contract. This conclusion is valid as long as these costs are the result of an undertaking required of the parents in order for the child care to be provided.”
interest charges paid by parents who pay their bills late no – these are not “charges that are … paid to provide childcare but rather to compensate the childcare centre when a parent fails to make a payment by the agreed date”
annual dues for parents wishing to be on daycare's Board no
fees for sunscreen and insect repellent yes

13 March 2003 Internal T.I. 2003-0183697 F - FRAIS DE GARDE

child care expenses can include liquidated damages for early termination of daycare contract

Parents were required to pay a penalty to a daycare centre pursuant to a liquidated damages clause in their contract with the centre, on their early termination of the arrangement. In finding that the penalty could qualify as a “child care expense,” the Directorate stated:

[T]he expression “expense incurred … for the purpose of providing … for an eligible child … child care services …” is sufficiently flexible to include contract termination fees where such fees were provided for in the initial agreement between an individual and a daycare centre that set out the commitments and obligations of each party.

4 October 1996 T.I. 962579 (C.T.O. "Child Care Component of Fees Paid to Private School")

Although RC has no guidelines as to the percentage of total fees charged by private schools that represents child care expenses, amounts paid for after-school and before-school care will ordinarily qualify, as well as the actual per student cost of lunch time supervision.

14 December 1990 Memorandum (Tax Window, Prelim. No. 2, p. 16, ¶1066)

Expenses incurred for the purpose of providing child care services include advertising expenses, placement agency fees, and transportation expenses incurred to locate, interview or bring a care-giver to Canada.

31 May 1990 T.I. (October 1990 Access Letter, ¶1462)

Discussion of day-care and monitoring services provided by a college.

Paragraph (a)

Administrative Policy

9 March 2004 External T.I. 2003-0046961E5 F - Frais payés à une famille d'accueil

occasional short stays with the parents do not qualify as residing with them

Mr. A and Ms. A have a child with a mental or physical impairment who qualifies for the tax credit under s. 118.3(1), which is transferred to Ms. A as the one with the lower income). The couple decided to place the child permanently in a foster family with whom the child lives full-time (but with occasional stays with the parents of under 24 hours), so that Ms. B of the foster family (who is not a health care professional) is remunerated by Ms. A.

In finding that the fees paid to Ms. B were deductible child care expenses, CRA stated:

[T]he child does not reside with their parents since the place where the child lives on a regular, normal or habitual basis is the foster family. In our view, occasional visits by the child to the child’s parents do not change that fact.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.2 - Subsection 118.2(2) - Paragraph 118.2(2)(b.1) fee paid for care by foster family for disabled child could qualify under s.118.2(2)(b.1 288
Tax Topics - Income Tax Act - Section 68 break-out of care component in the invoice for the attendant’s fee would permit CRA to recognize that component 230

Paragraph (b)

Subparagraph (b)(i)

Administrative Policy

4 January 2012 External T.I. 2011-0417371E5 F - Frais de garde d'enfants

child care corporation can render qualifying child care services to the child of its sole shareholder

Would child care expenses qualify as such under s. 63(3) where a corporation carrying on a child care business renders child care services for their fair market value to the child of its sole shareholder and employee? CRA responded:

Under subparagraph (b)(i) of the definition, services cannot be provided by the father or mother of the child. However, there is nothing in the Act that prevents an individual from incorporating his or her business in order to provide child care services. Consequently, if a taxpayer satisfies all of the conditions for the application of section 63, the taxpayer may claim child care expenses as defined in subsection 63(3) even if the child care expenses were paid to a corporation to which the taxpayer is employed.

Paragraph (d)

Administrative Policy

27 September 2004 External T.I. 2004-0067721E5 F - Frais de garde d'enfants

presumption that expenses incurred prior to kindergarten age are not educational

In a general discussion, CRA noted that “all fees paid to an educational institution in respect of a child who has not attained the age of compulsory schooling (i.e., before kindergarten for children in Quebec) should be considered to be child care expenses unless there is clear and conclusive evidence that the fees are educational expenses,” and also noted that “[f]ees charged for supervision during study sessions or other directed supervision activities could constitute child care fees if they are optional,” and that educational costs may include, for example, extracurricular activities and special schools.

15 October 2003 External T.I. 2003-0014535 F - FRAIS DE GARDE D'ENFANTS

fees for daycare at day sports camp could qualify
Also released under document number 2003-00145350.

A corporation operating a school that is registered as a recreation and sports activity business offers a "Sports-Études" program for athletes under 16 years of age who are performing well in a particular field, every day from 3:00 p.m. to 5:00 p.m. From 5:00 pm to 6:00 pm, a daycare service is offered to 11 and 12 year olds.

It also offers a multi-sports day camp for the summer and other school holidays for children aged 6 and up. It is a recreational camp designed to entertain children during school breaks. Childcare services are offered from 7:00 am to 9:00 am and from 4:00 pm to 6:00 pm every day.

Does the multi-sports day camp qualify as a day sports school or day camp as per IT-495R2, para. 2, and do the fees incurred by parents for children registered for the multi-sports day camp, as well as the additional fees paid for using the 5:00 p.m. to 6:00 p.m. daycare services for the "Sports-Études" program, qualify as child care expenses?

After noting the exclusion in para. (d) for “education” programs, and further noting its general position that “an educational program differs from child care in that an educational program is structured to achieve certain goals, develop skills and progress through a planned program whereas there is not the same expectation for a child in child care to develop specific educational goals,” CCRA indicated that, as a matter of first impression, such fees qualified.

Words and Phrases
day camp

Earned Income

Administrative Policy

15 October 2012 Internal T.I. 2012-0452161I7 F - Frais de garde, revenu gagné, RQAP

Quebec Parental Insurance Plan (QPIP) benefits not included in earned income

Are Quebec Parental Insurance Plan (QPIP) benefits received under the Act respecting Parental Insurance (Quebec) included in "earned income"? CRA responded:

QPIP tax benefits are not covered by any of the paragraphs in the definition of earned income in subsection 63(3). Rather … this type of benefit is included in computing a taxpayer's income under paragraph 56(1)(a). Indeed … subparagraph 56(1)(a)(vii) … provides that a benefit paid under [such] Act will be included in computing a taxpayer's income … .

Supporting Person

Administrative Policy

17 May 2016 External T.I. 2015-0603711E5 F - Personne assumant les frais d'entretien

parent living abroad was not a supporting person

A parent (Parent1) who lived in Canada with an "eligible child" incurred related child care expenses in order to work as an employee. The other parent of the child (Parent2) is not resident in Canada. The parents are married and not living apart because of a marriage breakdown. Is Parent2 considered a "supporting person." CRA responded that its:

practice is to consider that if a person has lived with the taxpayer, the person is considered to have resided with the taxpayer for purposes of the child care expenses deduction. …

Parent1 does not have to consider Parent2 when completing Form T778 as Parent2 is not a "supporting person" for purposes of the child care expenses deduction. Indeed, Parent1 and Parent2 have not lived together during the year.

27 July 2010 External T.I. 2010-0364841E5 F - Questions relatives à une séparation

no supporting person where two spouses lived separate and apart under same roof

In connection with finding that child care expenses incurred in the year, in the context of the correspondent living separate and apart from the correspondent’s spouse but their living under the same roof with their children, will be deductible by the parent who paid the child care expenses, provided that all the conditions for claiming the deduction are satisfied, CRA stated:

[T]here does not appear to be a "supporting person" … in the situation you have presented to us, since even if you lived in the same household as your spouse, you likely did not "reside with" her at any time during the first 60 days of 2010 … .

In this case, child care expenses may be deducted under subsection 63(1) by the paying parent for child care expenses incurred by him or her in the year of separation, provided all other conditions for claiming the deduction are satisfied.

Words and Phrases
resided with
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118 - Subsection 118(1) - Paragraph 118(1)(b) two separated spouses living under the same roof required to agree on which one claims the s. 118(1)(b) credit 155
Tax Topics - Income Tax Act - Section 118 - Subsection 118(1) - Paragraph 118(1)(a) joint payment of expenses incurred under the same roof did not preclud two separated spouses living “separate and apart” 179