Personal Taxation Q 'n A

There are several deductions and credits affected by children. Fees paid for childcare services are tax deductible to the spouse with the lower net income except in circumstances where the lower income spouse is in full time attendance at school, in hospital or incarcerated. You cannot claim fees paid to a related person under the age of 18 for childcare. You may claim fees paid to a babysitter, day care, day camp, or day sports camp. You are limited to how much you may deduct as expenses. For children under seven, you are entitled to a maximum of $8,000 per child and for children between seven and sixteen $5,000. Children older than 16 may qualify if they are eligible for the disability credit. A child under the age of 16 who qualifies for the disability tax credit is eligible for an amount up to $11,000. A person is further limited to a claim of 2/3 of their earned income. Fees paid for overnight camps are further limited to a weekly amount of $175 for children under seven and $100 for children over seven. Where the child attends an institution where both education and child care services are given, only the portion of those fees relating to child care are deductible. 

A new credit is available to offset the costs of adoption. A credit of 16% percent of fees paid up to a maximum of $15,000 is now available.

Please see CRA's page on various benefits and credits available for children with related links to provincial programs.