Reporting your income

If you determine that you are self-employed, report your income from daycare as business income on your income tax and benefit return. Enter your gross daycare income on line 13499^{Footnote 1}, and your net income or loss on line 13500^{Footnote 2}.

Calculate your gross and net income (loss) on a fiscal year basis using the accrual accounting method. For more information on fiscal year ends and the accrual accounting method, go to Business income tax reporting.

To calculate your net income or loss, we encourage you to use Form T2125, Statement of Business or Professional Activities. We also accept other types of financial statements.

If you use Form T2125, complete the "Identification" section. At the "Industry code" box, enter the code for daycare: 624410.

Enter your gross income from daycare on Form T2125, Statement of Business or Professional Activities, in Part 3A at amount 3A.

Your gross income includes all the income you earned from daycare services you provided during the year. This income includes payments from parents, as well as subsidies such as provincial or territorial grants to care for children.

If you received a grant to buy a daycare property, that amount is not part of your income. Instead, subtract the grant you used to buy the property from the capital cost of the property.

To calculate your net income, generally, you deduct the expenses that you incur to earn income from your daycare services from the gross income that you earn from those services.

Include all your income when you calculate it for tax purposes. If you fail to report all your income, you may pay a penalty of 10% of the amount you failed to report after your first omission.

A different penalty may apply if you knowingly, or under circumstances amounting to gross negligence, participate in the making of a false statement or omission on your income tax return. The penalty is 50% of the tax attributable to the omission or false statement (minimum $100).

For more information, go to Report business income and expenses.

Forms and publications

• Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income

Related links

• Capital cost allowance for your daycare
• Sole proprietors and partnerships