Ontario Government is helping to protect what matters most by proposing the new Ontario Childcare Access and Relief from Expenses (CARE) tax credit.
The cost of child care can be a barrier to employment, especially for parents with young children. CARE is designed to help reduce the cost of child care for working families, particularly families with low and moderate incomes. The CARE tax credit would be one of the most flexible child care initiatives ever introduced in Ontario, putting parents at the centre of the decision-making process.
- The credit would provide about 300,000 families with up to 75% of their eligible child care expenses, and allow families to access a broad range of child care options, including care in centres, homes and camps.
- The CARE tax credit would support families with incomes of up to $150,000.
- The CARE tax credit would be available in addition to the existing Child Care Expense Deduction (CCED), which provides provincial and federal tax relief toward eligible child care expenses.
- The CCED provides greater tax relief, on average, to higher-income families as a percentage of their expenses. In contrast, the CARE tax credit would provide a higher credit rate to families with lower incomes, filling the gap in support for these families. Lower-income families who would benefit include those joining the workforce or deciding to work more hours.
- Families could receive up to $6,000 per child under seven years of age, up to $3,750 per child between the ages of seven and 16, and up to $8,250 per child with a severe disability.
- Families would be able to claim the CARE tax credit, starting with the 2019 tax year, and would not have to gather any additional information when filing their tax returns.
- Parents would need to keep receipts for the child care expenses they incur.
- The CARE tax credit builds on Ontario’s commitment to help low-income workers through the Low-income Individuals and Families Tax (LIFT) Credit, which provides low-income workers, including those making minimum wage, up to $850 ($1,700 for couples) in tax relief.
“The CARE tax credit would be one of the most flexible child care initiatives ever introduced in Ontario. It is a plan to put parents, and not the government, at the centre of the child care decision-making process,” said Vic Fedeli, Minister of Finance. “We want parents to be able to choose the kind of care that is best for their children so that they can go to work, run a business, or study to acquire new skills.”
Beginning in the 2021 tax-year, Ontario would give families the choice to apply for and receive more timely support through regular advance payments during the year. This credit will allow parents to offset child care expenses they may incur when starting a new job, taking on longer hours, or going back to school.
The government has also committed up to $1 billion over the next five years to create up to 30,000 child care spaces in schools, including approximately 10,000 spaces in new schools in the 2019 Ontario Budget.