Subsection 63(1) - Child care expenses
Cases
Symes v. The Queen, 94 DTC 6001, [1993] 4 S.C.R. 695
Because the purpose for which the taxpayer incurred her child care expenses came squarely within the definition of "child care expenses" in s. 63(3), she was precluded from deducting such expenses in accordance with the more general rules governing deductibility in ss.9 and 18(1)(a).
See Also
Allott v. The Queen, 2010 DTC 1382 [at 4521], 2010 TCC 232
The taxpayers were permitted to deduct babysitting expenses despite being unable to obtain a receipt from the teenage babysitter. The filing of receipts was "directory" rather than "mandatory."
Deputy Minister of Revenue for Quebec v. Letarte, 97 DTC 5515 (Queb. C.A.)
The taxpayer was entitled to present evidence that she had paid $8,660 in child care expenses in the year notwithstanding that she had receipts from the caregiver for only $4,000 and that Article 353 of the Taxation Act (Quebec) provided that no deduction could be taken in the absence of the provision of such receipts.
Bailey v. MNR (1980), 1 C.H.R.R. 193 (C.H.R.T.)
The former s. 63 was discriminatory because it excluded men from the benefit of the deduction, unless they were unmarried, separated or had a wife who was incapable of caring for the children because of an infirmity or confinement to prison.
Articles
Debra Gordon, "Child-Care Deduction", 1999 Canadian Tax Journal, No. 6, p. 1588.
Paragraph 63(1)(d)
Administrative Policy
21 August 2014 Memorandum 2014-0542121I7 - Payments from the province of BC
The proposed Temporary Parental Educational Support payments would be provided by the B.C. government to parents of children in kindergarten through grade seven in the public school system in the event that a labour dispute with teachers was not resolved. The payment would be $40 per day per eligible child to help offset the cost of tutoring, child care or supervision. CRA stated:
If the Payments provided are a reimbursement of, or specific assistance for child care expenses, it is likely that paragraph 63(1)(d) would apply and the Payments would reduce the child care expense deduction otherwise available. If the Payments are made based on a child's grade level, with no requirement for a child care expense to be incurred by the recipients, the Payments will likely not be "a reimbursement or any other form of assistance" in respect of child care expenses, and the available child care expense deduction would not be reduced.
Subsection 63(2) - Income exceeding income of supporting person
See Also
George v. The Queen, 2010 DTC 1341 [at 4307], 2010 TCC 496
The taxpayer, who earned more than his spouse, could not deduct from income $10,000 of childcare expenses under s. 63. Woods J. at para. 8: "The appellant seeks an interpretation of section 63 which provides greater financial relief to families who care for severely disabled children. That may be desirable from a policy perspective, but it is not provided for in section 63."
The Queen v. McLaren, 90 DTC 6566 (FCTD)
The word "income" in s. 63(2) require the existence of a positive sum. Consequently, where the supporting person had no income, s. 63(2) did not apply.
Subsection 63(3) - Definitions
Child Care Expense
Cases
Fannon v. Revenue Canada Agency, 2012 DTC 5130 [at 7247], 2012 FC 876, aff'd 2013 DTC 5088 [at 5975], 2013 FCA 99
The taxpayer's son did not reside with him when he incurred expenses in caring for his son, and therefore the expenses were not "child care expenses" under s. 63(3). Near J. confirmed that s. 63(3) is not discriminatory under the Charter, as it does not perpetuate a disadvantage by perpetuation of prejudice or stereotypes. The mere deprivation of a financial benefit that would be available to parents with custody of their children is not enough to establish discrimination against parents without custody.
See Also
Jones v. The Queen, 2006 DTC 3531, 2006 TCC 501
Woods J. accepted the taxpayer's evidence that she decided to enrol her twelve year old daughter in an after-school gym class to accommodate the taxpayer's employment duties. Accordingly, the fees qualified under s. 63.
McLelan v. The Queen, 95 DTC 856 (TCC)
The taxpayer was able to deduct the cost of a nanny for the period of approximately two months prior to her return to work given that, among other things, "owing to market conditions relative to securing a good nanny, especially in her residential area, she felt that it was the most prudent thing to do to hire the nanny in question as soon as the nanny was available" (at p. 859).
D'Amours v. MNR, 90 DTC 1827 (TCC)
At a time that the taxpayer was on maternity leave but was still entitled to receive salary from her employer in an amount, which in combination with unemployment and insurance, resulted in her receiving 95% of her previous salary, she continued to pay the fees of a regular babysitter, which were held to be deductible.
Administrative Policy
4 October 1996 T.I. 962579 (C.T.O. "Child Care Component of Fees Paid to Private School")
Although RC has no guidelines as to the percentage of total fees charged by private schools that represents child care expenses, amounts paid for after-school and before-school care will ordinarily qualify, as well as the actual per student cost of lunch time supervision.
14 December 1990 Memorandum (Tax Window, Prelim. No. 2, p. 16, ¶1066)
Expenses incurred for the purpose of providing child care services include advertising expenses, placement agency fees, and transportation expenses incurred to locate, interview or bring a care-giver to Canada.
31 May 1990 T.I. (October 1990 Access Letter, ¶1462)
Discussion of day-care and monitoring services provided by a college.