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  • Child Care Subsidy

    Hi
    I see from my ex-wife's tax package that she received a Child Care Subsidy of $1200. Our total child care costs were $1250, and I paid her about $625 for child care since our incomes are close to 50/50.
    Did I pay too much? Is the Child Care Subsidy for her only, or is it for us both to pay the children's child care fees?
    She is the custodial parent. I have our kids every 2nd weekend and two evenings every other week.
    Thanks for your thoughts!!
    helpj

  • #2
    how is she getting subsidy and then claiming it on taxes? the portion that is paid to daycare is non deductible.......the portion that IS paid by parents is deductible. Does she have sole custody, split custody? this determines whether you can claim part of the expense. If custody 50/50 then you get half the deduction........on the other side of coin if 50/50 she wouldnt be entitled to subsidy

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    • #3
      do you have 1 child under 6 - because a Child Care Subsidy would not show anywhere on her own personal taxes..... but the UCCB ((Universal Child Care Benefit)) is a payment of $100 per month to parents of children that are 6 or under, and do not necessarily have to do with actual day care....

      typically a subsidy is from the city you live in - it is not a provincial/federal program.....

      Comment


      • #4
        Yes, you are paying too much for daycare.

        Daycare subsidies are administered by your local municipality if youare in Ontario at least. Many cities have a calculator online to determine approximately what the cost would be based on income. If you are not paying the daycare directly, begin to do so immediately. This way you get the tax credit and a receipt for what you have paid. Also get your ex's NOA so you can determine their tax bracket and tax rate.
        You then reconcile the net cost to each parent based on after tax amounts and pay your share.
        So for arguments sake let's say subsidy pays everything except for $5 per day. At 20 days per month this equals $100 per month. Your ex is then claiming the maximum daycare benefit for children from the Feds and being paid $100 per month. This means she has effectively paid zero and you have overpaid $625.

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        • #5
          Just remember daycare costs are section 7 extraordinary costs and should be split prportionately and after tax. I would demand her NOA and stop paying (only the daycare bit though) until she provides it.

          Comment


          • #6
            Originally posted by cbarker78 View Post
            do you have 1 child under 6 - because a Child Care Subsidy would not show anywhere on her own personal taxes..... but the UCCB ((Universal Child Care Benefit)) is a payment of $100 per month to parents of children that are 6 or under, and do not necessarily have to do with actual day care....

            typically a subsidy is from the city you live in - it is not a provincial/federal program.....
            I think cbarker78 is right....it sounds like it is the UCCB, which is not Subsidized Child care.

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            • #7
              Yeah the magic number of $1200 showing up on taxes as a child benefit is most likely not subsidized daycare.

              The easiest way to tell is to request receipts from the daycare. The parent's only pay the amount that is not covered by the city if they have a subsidized spot. If possible I would simply call the daycare and ask if your child's spot is subsidized or not.

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              • #8
                Oops! I apologize for not being clear and accurate. :S
                It was not a "subsidy". It was the "Ontario Child Care Suppliment for Working Families" which paid her $100 per child under 6; 1200. She had to claim this as income. I am not sure if this "Child Care Supliment" (which happened to be enough to pay for all but $50 worth of our daycare last year) should affect how much I contribute to the child care costs.
                On the other hand, her Net Income was around $52,000, and she claimed $1250 worth of child care on her taxes. I paid half of that $1250 to her, and she is being reembursed for the portions she paid as well as the portions I paid. It my understanding that since the kids don't live with me, I can't claim the $625 I paid towards my childrens child care.
                Did I pay to much?

                Comment


                • #9
                  No, she receives those benefits for the children but you are still required to pay your half. She had to pay her half out of her household income, and so do you.

                  You didn't overpay now that we have more information from you.

                  I can't confirm that NCP can't claim daycare expenses for sure, but I believe that part is also correct.

                  Comment

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