If your child care expenses deduction (line 21400) is $0, here's how to understand why:
Check your T778 calculation:
- Go to the Summary > Documents section in your Wealthsimple Tax profile
- Expand the T778 Child Care Expenses Deduction form to view the detailed calculation
Common reasons for a $0 deduction:
- You're the higher-income partner:
- Generally, only the lower-income partner can claim these expenses
- Your earned income is $0:
- The lower-income partner must claim expenses, even with $0 earned income
Understanding "earned income":
The CRA defines earned income as the total of:
- Employment income (including tips and emergency volunteer allowances)
- Net self-employment income (excluding losses)
- Taxable portions of scholarships, fellowships, and research grants
- Certain government employment program supplements
- CPP/QPP disability benefits
- Apprenticeship grant program amounts
Maximizing your childcare deduction:
- Ensure all eligible child care expenses are reported
- Verify that the correct partner is claiming the expenses
- Check that all sources of earned income are included
If your deduction is still $0:
- Review your income sources against the CRA's definition of earned income
- Ensure you've correctly reported your marital status and partner's income
- Double-check all entries in the Your Dependants section
Remember:
- Child care deductions are subject to specific CRA rules and limitations
- The deduction cannot exceed two-thirds of the lower-income person's earned income
If you need assistance understanding your childcare deduction calculation in Wealthsimple Tax, please contact Wealthsimple support. For questions about your specific childcare expense situation, consider consulting with a tax expert.
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