Personal Finance

Child care expenses question

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  • Feb 27th, 2010 11:47 pm
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[OP]
Member
Aug 24, 2002
419 posts
5 upvotes
Calgary

Child care expenses question

Situation:
My wife didn't work last year, so besides universal child care payments she had no income. I worked full time and obviously was higher earner then her.
We have a daughter that was in full time pre-school. School sent us a receipt for $8500 for child care expenses.
Question: unless I'm missing something, child care expenses must be claimed by lower earning parent (in this case my wife) unless that parent was in school or something along those lines (none of conditions apply to my wife). That means that entire amount can not be transferred to me for a claim and it's pretty much getting wasted as my wife is not getting any sort of refund due to not earning enough.
This does not seem fair to me or am I missing something here?
14 replies
Deal Addict
Dec 28, 2006
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Saskatoon
You are not missing anything. The point of the child care deduction is for parent(s) who NEED to put their kid(s) in childcare so that they can work and earn taxable income or go to school.

When there is a stay at home parent there is no need for the child to be in child care, the stay at home parent is supposed to be doing that.
[OP]
Member
Aug 24, 2002
419 posts
5 upvotes
Calgary
Thank you for very good explanation, it makes sense now.
Deal Addict
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Nov 2, 2007
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GVRD
Its just another ******** tax rule. Why would the Gov want to penalize someone for putting your child in pre school. This is not the same as hiring a sitter, and I would argure that there is a direct benefit to the school system in the future if a child attends pre school.
[OP]
Member
Aug 24, 2002
419 posts
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Calgary
chenwaa123 wrote:
Feb 27th, 2010 3:41 pm
Its just another ******** tax rule. Why would the Gov want to penalize someone for putting your child in pre school. This is not the same as hiring a sitter, and I would argure that there is a direct benefit to the school system in the future if a child attends pre school.
You are making valid point, that I totally support, but rules are rules until changed, so just have to go with it for now.
Deal Guru
Dec 31, 2005
13306 posts
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chenwaa123 wrote:
Feb 27th, 2010 3:41 pm
Its just another ******** tax rule. Why would the Gov want to penalize someone for putting your child in pre school. This is not the same as hiring a sitter, and I would argure that there is a direct benefit to the school system in the future if a child attends pre school.
Preschool is not part of the school system and for all intents and purposes is equivalent to day care (yes, including Montesorri at this age...which I attended ftr). So really, no different than a sitter.

The tax credits are there to help people pay for child care when they go off to work. If someone is at home and not working, the expectation is that unless they are looking for a job, they can look after the kid. This is not an education credit it is child care (daycare etc).
Member
Oct 2, 2005
409 posts
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chenwaa123 wrote:
Feb 27th, 2010 3:41 pm
Its just another ******** tax rule. Why would the Gov want to penalize someone for putting your child in pre school. This is not the same as hiring a sitter, and I would argure that there is a direct benefit to the school system in the future if a child attends pre school.
The child-care deductions is not a tax credit for tution paid. The rationale for giving working parents a deduction from income is that it is "necessary" inorder to earn that income. IOW, without the deduction, one parent would have to stay home and look after the kids, an thus wouldn't earn that income.

If you have one stay at home parent that rationale is not applicable, so no tax deduction is appliable.
[OP]
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Aug 24, 2002
419 posts
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Calgary
nalababe wrote:
Feb 27th, 2010 3:50 pm
Preschool is not part of the school system and for all intents and purposes is equivalent to day care (yes, including Montesorri at this age...which I attended ftr). So really, no different than a sitter.
Well truthfully, pre-school my daughter goes to is much more school than day care, so I would disagree with you here.
Deal Guru
Dec 31, 2005
13306 posts
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iakov wrote:
Feb 27th, 2010 3:52 pm
Well truthfully, pre-school my daughter goes to is much more school than day care, so I would disagree with you here.
So are many day cares...and many daycares are far more expensive than 8500 a year. It is not school as it is not governed by the board of education. Whether you think they are learning more is irrelevant.
Deal Fanatic
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Jan 27, 2007
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Peterborough
If your wife was not working and had no income - what is the reason for the $8500 in chaild care expenses?

Were you not aware of the restrictions on claiming the expenses beforehand?
[OP]
Member
Aug 24, 2002
419 posts
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Calgary
What do you mean "what is the reason"? Simply wanting my child to be well educated and be prepared for school is not reason enough?
And no I was not aware about why child care expenses are usually claimed, but very knowledgeable gentleman explained that to me very clear earlier in the thread.
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Jun 11, 2005
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dutchca wrote:
Feb 27th, 2010 9:09 pm
If your wife was not working and had no income - what is the reason for the $8500 in chaild care expenses?

Were you not aware of the restrictions on claiming the expenses beforehand?
iakov wrote:
Feb 27th, 2010 10:44 pm
What do you mean "what is the reason"? Simply wanting my child to be well educated and be prepared for school is not reason enough?
And no I was not aware about why child care expenses are usually claimed, but very knowledgeable gentleman explained that to me very clear earlier in the thread.
Dutchca is a helpful contributor to tax threads in this forum and there is no need to question his/her intentions.

In any event, wanting a child to be well educated and prepared for school are NOT good enough because such expenses are not "child care expenses" as defined in the Income Tax Act. As Ghostryder said, these are generally amounts incurred to enable a parent to earn employment income or carry on business.
[OP]
Member
Aug 24, 2002
419 posts
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Calgary
mudd_stuffin wrote:
Feb 27th, 2010 11:05 pm
Dutchca is a helpful contributor to tax threads in this forum and there is no need to question his/her intentions.

In any event, wanting a child to be well educated and prepared for school are NOT good enough because such expenses are not "child care expenses" as defined in the Income Tax Act. As Ghostryder said, these are generally amounts incurred to enable a parent to earn employment income or carry on business.
I don't care if she's helpful contributor or not, her question was out of line.
Also, wanting child to be well educated and prepared for school ARE good enough for me and I don't care what Income Tax Act says.
Income Tax Act is not my daughter's parent.
Get it?
Deal Addict
Jun 11, 2005
2569 posts
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iakov wrote:
Feb 27th, 2010 11:30 pm
I don't care if she's helpful contributor or not, her question was out of line.
Also, wanting child to be well educated and prepared for school ARE good enough for me and I don't care what Income Tax Act says.
Income Tax Act is not my daughter's parent.
Get it?
Get what?

I did not ask that question and you stating "get it?" to me is OUT OF LINE.

Put it this way, these expenses are NOT good enough for a deduction. Your question was a tax question, was it not?

On the other hand, your question was NOT about what are good enough for you. I don't care (and neither does Dutchca in all in likelihood) about your parenthood.

You asked a tax question and you did not even get that it is not about parenthood.
[OP]
Member
Aug 24, 2002
419 posts
5 upvotes
Calgary
mudd_stuffin wrote:
Feb 27th, 2010 11:39 pm
Get what?

I did not ask that question and you stating "get it?" to me is OUT OF LINE.

Put it this way, these expenses are NOT good enough for a deduction. Your question was a tax question, was it not?

On the other hand, your question was NOT about what are good enough for you. I don't care (and neither does Dutchca in all in likelihood) about your parenthood.

You asked a tax question and you did not even get that it is not about parenthood.
Listen, I got my answer in the second post of this thread, then people started questioning why I have my daughter in pre-school and such.
Let me spell it out for you.
I understand that I will not be able to claim Child Care Expenses. I'm fine with this, I'm not arguing anything. Ok?
I apologize for taking your valuable time to look through this thread and even write in it.
I'm sorry.

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