INCOME TAX SEASON - Claiming childcare expenses & Fitness Tax credit

[melee]

Hello Everyone,


My DH has 2 previous children from first marriage and pays one half of the daycare cost directly to to the daycare centre. He receives his own receipts.


Would he be able to claim his portion of the childcare expenses come income tax time? If so, what would be the process?


He has also paid and obtained a receipt for one of his child's swimming lessons.


Can he also claim his receipt under the fitness tax credit?


We were thinking about claiming the child care amount last year but his ex told us that we can't claim seperately but instead she will claim it and split the refund. we have YET to receive it! Lesson learned...That's why we are now receiving our own receipts from the daycare.

[Foredeck]

There is a few ways to do this.

#1, you could both claim half of it, and pay the full amount.

#2, if one person claims 100% of the amount, the other person will only have to reimburse 70% or so of the total cost.

Your share of the extraordinary expenses is only the net amount, so since it's tax deductible, you only have to pay the after tax amount.

The best way to do it is to agree between you that the highest earning person claims 100% of the expenses and then shares the tax return. The marginal tax rate would be slightly higher.

Also, with two children, you can claim full custody of one children each as far as CRA is concerned. That way, you can double the CCTB/UCCB and possibly the equivalent amount to a spouse. But, that might not be in your case, since your husband is remarried.

[melee]

Thank you for the info Foredeck.

How would you claculate the "net" amount?

[Foredeck]

Basically you take the total amount multiplied by (1-marginal tax rate).

It would depend on your salary, you can find the 2008 income tax files on the CRA web site.

[Mess]

There is a limit to amount you can claim for child care, $7000 I believe (it may have gone up last tax form). Can 2 parents who both pay child care each claim up to $7000 or do they split it? (Full time care at an accredited Early Childhood Education centre for an infant can run over 10k per year for example, so $5000 each would exceed the one child total).

Where parents have 50/50 and 1 child, obviously only parent can claim the child as a dependant. Can the other parent (who paid the child care) claim the child care costs or does this raise eyebrows?

If 1 parent has 60%+ and claims the full deductions for dependant and receives full CTC etc, can the other parent claim child care expense without raising eyebrows? The tax form would not really indicate that this parent even has a child.

Section 7/child care costs are split according to respective incomes, not according to custody/access levels, so presumably each parent can claim the amount they paid? Or an amount relative to access? (ie the child was in my care that day, so daycare costs are deductable by me). Or it doesn't matter and wont' be questioned, we can split it up to our best advantage?

These are all slightly different scenarios, they have come up while we were discussing/arguing custody and I never could find a source for answers.

[workinginthesystem]

I have to disagree (maybe) with MESS. To claim childcare costs, the children have to be living with you, or at least half time with you. If the children live primarily with their mom, your DH cannot claim the childcare, and would be best to give his ex the receipts.
If, however, the kids are 50/50 between the two of them, then MESS is right.
See Line 214 - What are child care expenses?

[Mess]

workinginthesystem, I wasn't actually saying anything, those were all questions, but I'm glad you partially agreed with me anyway .

I appreciate that link. So for example, if a father had the child 20% of the time and was not considered shared, he was NCP. But that 20% could be Tues and Wed, so he is paying child care in order to work. Or it could be weekends, so he should give the receipts to his ex.

I would suppose that if this father wasn't claiming the child as a dependant in any other way, CRA might challenge this but accept the explanation? The rule specifies that the child be a dependant. I guess we'd have to phone the CRA hotline to understand this.

A couple with 50/50 access really shouldn't be putting all the daycare receipts onto one tax return for maximum use. But how does the $7000 limit work here?

How does 50/50 claim 1 child as a dependant?

[dadtotheend]

The rule is that paying support for the children disqualifies you from claiming child care expenses, or the eligible dependant claim, or the amount for children under 17.

This has been thoroughly discussed in many other threads. Do a search on eligible dependant for lots of discusssion.

[Foredeck]

However, in 2008, the CRA changed it. They acknowledged that if you have shared custody, both parents are paying each other. However, only one parent is paying the net amount.

That rule is no longer in effect as of last year, but the CRA is still refining how it's treating shared custody cases.

[melee]

There is a member on here and for the life of me, I can't seem to remember his user name or which topic he wrote on. But he is a single dad that has apparently gone through this situation and have been dealing with the CRA for years about this. He stated that he does receive his own statements and tax receipts from daycare and does indeed claim them. i really wish I could find his thread!

Things just don't seem to be fair...as far as I'm concerned, if you pay it, you should claim it!

[billiechic]

We each pay daycare directly, but this is the first year so I don't know how we will claim. We have her 50/50 but I have requested that I claim her as dependant.

Right now we are alternating cheques from CCTB. What happens next year though?

[melee]

i'm trying to look through the posts and see if I can find it!