Canadian employers who are not in the child care services business can claim Child Care Tax Credits for creating new child care spaces.
These new child care spaces must be in new or existing licensed child care facilities and can be for the children of employees or for other children.
The Child Care Tax Credit is equal to the lesser of $10,000 or 25% of the eligible expenditure per child care space created.
These eligible expenditures may include the cost of depreciable property and/or specified start-up costs; they may not include ongoing expenses of the child care facility such as supplies, wages or utility costs.Some of the depreciable property that is considered an eligible expense is:
- The building where the care facility is located;
- Furniture and appliances;
- Playground structures and equipment.
Specified start-up costs that are eligible for this Investment Tax Credit include expenses such as building permits, architect's fees and regulatory inspections.
For details, see page 66 of the T4012 T2 Corporation - Income Tax Guide).
To claim Child Care Tax Credits, you need to complete Parts 24 to 28 of T2SCH31: Investment Tax Credit - Corporations or complete T2038(IND): Investment Tax Credit (Individuals).
Like other Investment Tax Credits, any unused Child Care Tax Credits can be carried back three years or carried forward 20 years.
