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Childcare expenses in shared custody situations

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  • Childcare expenses in shared custody situations

    Hi, my apologies if this has already been asked. I've searched the forum but could not find anyone with the same question.

    I have shared custody of my kids (ages 10 and 11) with my ex-wife. We both individually pay the nanny for childcare for the time that they are with us (equal split of time). The nanny issues each of us receipts for the amounts paid to her.

    In our situation, if we each pay the nanny $10500 for childcare (she earns $21000 altogether), can we EACH claim $10000 in childcare expenses for both kids (2x$5000 based on their ages) or is the limit of $5000 per child a hard limit regardless of the fact that we both incur these costs in order to be gainfully employed?

    I've called the CRA on a number of occasions and have been told both yes and no to the question!

    Anyone know the answer?

    Thanks!

  • #2
    One of you should claim the daycare expense and then pay the other the share of the tax benefit. Normally one person would pay the bill and subtract the tax benefit before calculating it.

    How do you normally calculate s7 expenses? What is the %?

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    • #3
      For Schedule 7 expenses we pay 50% each and do a quarterly reconciliation.

      The CRA agent that told me that each child can only be claimed by one parent (can be the same parent) said that an easy way would be for each of us to claim one child.

      Another CRA agent said I can claim both children ($10000 deduction) and my ex-wife can ALSO claim both children (and she would also get a $10000 deduction) since we are separate households now and are both incurring these costs in order to earn an income.

      Confusing and frustrating that I can't get a straight answer. I'm just wondering what the general consensus is here on the forum for what is actually allowed.

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