Tax Tips for Families with Kids in Daycare or Private School

Raising kids is expensive—and daycare or private school fees can take up a huge part of your budget. The good news? The CRA offers several tax benefits that can help you lower your tax bill.
Here’s a simple guide to the most important tax tips every parent should know.

1. Claim Child Care Expenses (Daycare, Nannies, Camps)

If your child is in daycare, after-school care, preschool, summer camps, or with a nanny, you may qualify to claim Child Care Expenses.

What counts as child care expenses?

• Licensed daycare centres

• Home daycare

• Nanny or babysitter costs

• Preschool programs

• Before/after-school supervision

• Day camps and March Break camps

• Overnight camps (with limits)

Who should claim it?

Usually the lower-income spouse must claim child care expenses, even if the higher-income spouse pays for it.

How much can you claim?

• $8,000 per child under 7

• $5,000 per child aged 7–16

• $11,000 per child with a disability

These deductions directly lower your taxable income—which means bigger refunds.

2. Private School Fees: What You Can and CANNOT Claim

Most private school tuition cannot be claimed as a tax deduction.

However, there are important exceptions:

You can claim part of the fees if:

1. The school is religious – A portion of tuition may qualify as a charitable donation.

2. Special needs – If your child requires specialized education or therapy, a significant portion of fees may be deductible as a medical expense.

3. Boarding schools – Some costs may qualify under child care expense rules.

Always ask the school for an official breakdown or tax receipt if applicable.

3. Don’t Forget the Canada Child Benefit (CCB)

Your daycare or school costs don’t directly affect your CCB, but your tax return does.

The lower your taxable income, the higher your CCB payments may be.

Ways parents often increase CCB:

• Claim all eligible child care expenses

• Split deductions properly between spouses

• Ensure the lower-income spouse claims the right credits

• File taxes on time (both spouses must file!)

Even a small reduction in income can increase your CCB by thousands per year.

4. Medical Expenses: A Hidden Tax Saver

Parents often forget that many child-related medical costs are claimable:

• Therapy for learning disabilities

• Occupational or speech therapy

• Psychological assessments

• Prescription medications

• Some private school programs for special needs

Medical expenses must exceed a certain threshold to create savings—but once they do, the tax benefit is significant.

5. Claiming Arts and Sports – Provincial Benefits

While the old federal credits no longer exist, many provinces still offer:

• Children’s arts tax credit

• Children’s fitness or sports credit

• Credits for tutoring or learning programs

• Provincial child care subsidies

Check provincial guidelines—parents often miss these!

6. Keep Your Receipts All Year

To claim any of these benefits, the CRA requires:

• Official daycare receipts

• School tax receipts

• Payment records

• Contracts with babysitters or nannies

• Medical documentation (if applicable)

Even digital copies are fine—as long as they’re readable.

7. Get Professional Help (It Usually Saves Parents More)

Most families leave money on the table simply because:

• They claim expenses under the wrong spouse

• They forget certain deductions

• They don’t know which school fees qualify

• They don’t adjust income reporting to maximize CCB

A tax professional can help you legally reduce your income and increase benefits.