Canada Customs and Revenue Agency

 

A - Class Nannies and Caregivers Inc. has dedicated this page to provide additional information on related tax benefits that you and your family can avail by employing a nanny or a caregiver. Please be advised that the information provided on this site is solely for informational purposes and cannot be construed as a legal advice. Please contact an accountant or Canada Customs and Revenue Agency, formerly Revenue Canada, at 1-800-959-8281 for further details.

 

Business Payroll Account Number Registration

You can register for a Business Number (BN) and one or more of the Canada Revenue Agency (CRA) accounts at the same time.

By Internet
Business Registration Online is a service that allows you to register for a BN or a CRA account via the Internet. You can also register for some provincial programs accounts at the same time. Businesses that do not have complex registration requirements can use this service. For more information, see What you can register for.

By Phone
You can register for a BN and CRA accounts by calling our Business Enquiries line at 1-800-959-5525. Before calling, be ready to answer all the questions in Part A of Form RC1, Request for a Business Number (BN), and any other questions in the form that relate to the accounts you want to open.

By Mail
You can register for a BN and CRA accounts by completing Form RC1, Request for a Business Number (BN) and mailing or faxing it to your tax services office.

Completing Form RC1, Request for a Business Number (BN)

See Completing Form RC1 for details on completing the form.
 

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Child Care Expenses Deductions

 

Who can claim child-care expenses?

If you are the only person supporting the child, you can claim child care expenses you incurred while the eligible child was living with you.

However, there may have been another person who lived with you at any time in 2008 and at any time during the first 60 days of 2009 who was:

1. the eligible child's parent;
2. your spouse or common-law partner, if you are the father or the mother of the child; or
3. an individual claiming an amount for the eligible child on line 305, 306, 315, or 367 of their Schedule 1.
If there is another person, the person with the lower net income (including zero income) must claim the child care expenses unless one of the situations in Part C or in Part D of the Form T778, Child Care Expenses Deduction for 2008, applies.

If there is another person, and one of the situations in Part C or in Part D applies, the child care expenses can be claimed by the person with the higher net income, or in part by both the person with the higher net income and the person with the lower net income. In any such situation, the person with the higher net income must calculate the claim first.

If there is another person and you have equal net incomes, you have to agree on which one of you will claim the expenses.

If you got married or began living common-law in 2008, you and your spouse or common-law partner have to consider your net incomes for the whole year. Include child care expenses you both paid for the whole year.
 

What are childcare expenses?

Child care expenses are amounts you or another person paid to have someone look after an eligible child so that you or the other person could:

1. earn income from employment;
2. carry on a business either alone or as an active partner;
3. attend school under the conditions described in Educational program; or
4. carry on research or similar work, for which you or the other person received a grant.
The child must have lived with you or the other person when the expense was incurred for the expense to qualify. Usually, you can only deduct payments for services provided in Canada by a Canadian resident. See Other situations for exceptions.

How to claim child-care expenses?

Use Form T778, Child Care Expenses Deduction for 2008, to calculate the amount you can claim. You should attach one copy of the completed Form T778 to your income tax and benefit return and claim the deduction on line 214. You should not send receipts with your return. However, you should keep them in case the Canada Revenue Agency (CRA) asks to see them. To get forms or publications, visit our Web site at www.cra.gc.ca/forms or call 1-800-959-2221.

For each eligible child under seven years of age, there is a supplement to the basic Canada Child Tax Benefit. This supplement is reduced by 25% of the child-care expenses you or your spouse or common-law partner claimed. If you or your spouse or common-law partner does not need the full child care expenses to reduce federal tax to zero, claim only what you need, since this may increase your supplement. However, keep in mind that you cannot carry forward unclaimed expenses to another year.

Form T778, which is available on our Web site at www.cra.gc.ca/forms or by calling 1-800-959-2221, contains more information on child care expenses. If you claimed child care expenses on your 2004 return, you will find a copy of Form T778 included with the 2008 tax package you receive in the mail. For more details, visit our Web site at www.cra.gc.ca or call 1-800-959-8281.

 

Additional information: Child Care Expenses Deductions for 2008

 

Source: Canada Customs and Revenue Agency

 

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Disability amount

 

The disability amount is a non-refundable tax credit that reduces the amount of income tax you have to pay.

You can claim a supplement if you were under 18 at the end of the year and you qualify for the disability amount. However, child care expenses and attendant care expenses anyone claimed for you for 2008 may reduce the claim.

To find out if you can claim the disability amount, see Form T2201, Disability Tax Credit Certificate, which is included in this guide. If you have previously qualified but your period of approval has ended or your condition has improved, see Form T2201.

Tax Tip
Your return may be processed faster if you are preapproved for the disability amount. You can send a completed Form T2201 at any time during the year to one of the tax offices listed. After we review your T2201, we will tell you in writing whether or not you can claim the disability amount on your return. If you are filing your return and have not received a letter in response to your application, claim the disability amount as though you qualify.

If you were 18 or older at the end of 2008, claim the federal disability amount of $6,596 on line 316 of Schedule 1. If you live in Saskatchewan, your provincial disability credit is also $6,596. If you live anywhere else in Canada, see line 5844 in the provincial or territorial pages of your forms book to find out how much you can claim.

If you were under 18 at the end of 2008, calculate the federal disability supplement by completing the chart for line 316 on the Federal Worksheet in your forms book. If you live in Saskatchewan, Northwest Territories, or Nunavut, your provincial or territorial supplement is the same as your federal supplement. If you live in any other province, complete the chart for line 5844 on the Provincial Worksheet in your forms book.

 

Additional information: Information Concerning People with Disabilities

 

Source: Canada Customs and Revenue Agency

 

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Caregiver Amount

 

Can you claim a caregiver amount?

 

If, at any time of the year, you (either alone or with another person) maintained a dwelling where you and a dependant lived together, you may be able to claim a maximum amount of $3,848. The dependant must have been one of the following individuals:

  • your or your spouse or common-law partner's child or grandchild; or

  • your or your spouse or common-law partner's brother, sister, niece, nephew, aunt, uncle, parent, or grandparent who was resident in Canada.

You cannot claim this amount for a person who was only visiting you.

As well, your dependant must have met all of the following conditions. The person must have:

  • been 18 or over at the time he or she lived with you;

  • had a net income of less than $16,989 (line 236 of his or her return, or what line 236 would be if he or she filed a return); and

  • been dependent on you due to physical or mental infirmity or, if he or she is your or your spouse or common-law partner's parent or grandparent, born in 1940 or earlier.

Additional information: Caregiver Amount

 

Source: Canada Customs and Revenue Agency

 

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