If you have young children, part of your financial obligation will involve some sort of childcare cost. On divorce or separation, the parents will normally share this “special expense”, provided daycare is necessary due to work, education or health reasons. If you are given receipts by the daycare provider, you can claim a deduction on your taxes for daycare expenses. The rule that the lowest income earner must claim the deduction while you are living in the same home no longer applies once you separate and live at different addresses.
Sharing Daycare Expenses in Divorce or Separation
When deciding how to share daycare expenses, the parents must first determine which proportion each of them will pay — will you share it 50/50 or in some other proportion? Will you each pay your share directly to the caregiver or will one of you pay the caregiver or daycare centre and be reimbursed by the other parent? In both cases, you have to take into account the tax deduction. If one parent pays the whole amount, the other reimburses his or her share of the actual cost, once the deduction is taken into account.