Claiming child care expenses
Pre-test question
Sorry, that's incorrect
Child care expenses are entered into the profile of the child for whom the expenses were paid.
That's correct
Child care expenses are entered into the profile of the child for whom the expenses were paid.
Instructions
- Open the tax software
- Review the Background information and Required slips (tax slips, receipts, etc.)
- Provide all required information for the appropriate sections of the tax software
- Once completed, compare your results with the solution provided
- Afterwards, refer to Key points of the tax software and the Takeaway points
Background information
Situation
Candice is a single parent with two children (Rose and Rhys). Both children attended daycare and Candice would like to claim those child care expenses. Candice also received Advanced Canada workers benefit payments.
| Categories | Datas |
|---|---|
| Name | Candice Lockhart |
| Social insurance number (SIN) | 000 000 000 |
| Address | 123 Main Street City, Province X0X 0X0 |
| Date of birth (DOB) | May 15, 1986 |
| Marital status | Divorced |
| Number of children (2) | Daughter: Rose Lockhart DOB: March 30, 2018 Son: Rhys Lockhart DOB: June 4, 2022 |
Required slips
T4 – Statement of Remuneration Paid
Text version of the above image
T4 – Statement of Remuneration Paid
Protected B
Employer’s name: 123456 Canada Ltd.
Employee’s name and address:
Last name: Lockhart
First name: Candice
123 Main Street
City, Province X0X 0X0
Box 12: Social insurance number: 000 000 000
Box 14: Employment income: 42,275.00
Box 16: Employee’s CPP contributions – see over: 827.36
Box 18: Employee’s EI premiums: 652.43
Box 20: RPP contributions: 782.50
Box 52: Pension adjustment: 1,605.00
Box 22: Income tax deducted: 2,807.00
Box 24: EI insurable earnings: 42,275.00
Box 26: CPP/QPP pensionable earnings: 42,275.00
Box 44: Union dues: 165.00
Box 45: Employer-offered dental benefits: 5
T4E– Statement of Employment Insurance and Other Benefits
Text version of the above image
T4E – Statement of Employment Insurance and Other Benefits
Protected B
Recipient’s name and address:
Candice Lockhart
123 Main Street
City, Province X0X 0X0
Box 7: Repayment rate: 30%
Box 14: Total benefits paid: 840.00
Box 15: Regular and other benefits paid: 840.00
Box 22: Income tax deducted: 80.00
Box 12: Social insurance number: 000 000 000
RC210 – Advanced Canada workers benefit (ACWB) statement
Text version of the above image
RC210 – Advanced Canada workers benefit (ACWB) statement
Issued by: Canada Revenue Agency
Lockhart, Candice
123 Main Street
City, Province X0X 0X0
Social insurance number: 000 000 000
Box 10: Total Basic Advanced Canada workers benefit: 759.00
Sunny Nursery Daycare Centre receipt
Text version of the above image
Sunny Nursery Daycare Centre
100 Sunny Street
City, Province X0X 0X0
Tel no: 476-123-4567
Business no.: 11111111RT0001
January 25, 20XX
To whom it may concern:
Candice Lockhart paid the following amounts in 20XX for child care services provided to her children:
Rose Lockhart (daughter)= $1,011.00
Rhys Lockhart (son)= $3,160.00
Should you have any questions please do not hesitate to contact me.
Sincerely,
Beth Lindale
Program Supervisor
Review your results
Solution to Claiming child care expenses.
Key points of the tax software
Important note
To access complete instructions on the various steps of entering data into the software, click on the title of each section below.
Candice's interview
- Click T4 and employment income in the left-side menu
- Click the + sign next to T4 income (earned in any province except Quebec) in the T4 and T4E section
- Enter the amounts from the tax slip
Employment insurance and other benefits (T4E)
- Click T4 and employment income in the left-side menu
- Click the + sign next to T4E – Employment insurance other benefits in the T4 and T4E section
- Enter the amounts from the tax slip
Advanced Canada workers benefit (RC210)
- Click Other information slips in the left-side menu
- Click the + sign next to RC210 – Canada workers benefit advance payments statement [Federal line 41500]
- Enter the information from the tax slip
Rose's interview
- Click Dependant ID in the left-side menu
- Select the appropriate option from the Relationship drop-down menu
- Enter the child’s date of birth
- Select No from the Did this dependant have any income in 20XX? drop-down menu
- Click Child care in the left-side menu
- Click the + sign next to Daycare (includes day camp)
- Enter the amount paid for that child
Rhys' interview
- Repeat the same steps you did for Rose
- Repeat the same steps you did for Rose
Takeaway points
- The Child care topic is automatically generated in the left-side menu for Rose and Rhys because of the year of birth entered on the Dependant Identification page
- The child care expenses must be entered in the profile of the child for whom the expenses were paid
- in this case, the amount of $1,011 is entered under Rose’s profile and $3,160 is entered under Rhys’ profile
- The tax software automatically generates Form T778 and calculates the total amount of eligible child care expenses. This amount is reported on line 21400 of Candice’s tax return