Childcare Tax Deduction in Canada — T778 Form & Daycare Receipts Explained | Daisy Days

Every year, thousands of Canadian families — including Daisy Days Daycare families in Regina SK — can reduce their tax bill by claiming childcare expenses on their federal tax return. Understanding the CRA childcare deduction, the T778 form, and how CWELCC affects your 2026 deduction is important for every enrolled family.

What Is the CRA Childcare Expense Deduction?

The Child Care Expenses Deduction (Line 21400 on your T1 personal income tax return) allows Canadian families to deduct childcare expenses paid to licensed providers from their taxable income. The deduction is calculated on Form T778 and reduces the taxable income of the parent who files the deduction (typically the lower-income earner in two-parent households).

This is a deduction, not a credit — it reduces your taxable income, which then reduces the tax you pay. The value depends on your marginal tax rate.

T778 Deduction Limits for 2026

Child Category	Annual Deduction Limit
Child under 7 years at year end	Up to $8,000 per child
Child age 7-16 years	Up to $5,000 per child
Child with severe disability (any age under 18)	Up to $11,000 per child

Limits are the MAXIMUM deductible — you can only deduct what you actually paid. Confirm 2026 limits at canada.ca/cra.

Important: CWELCC Reduces Your Deductible Amount

Because CWELCC reduces your out-of-pocket cost to approximately $10/day, the amount you can deduct is your actual net payment — the approximately $10/day CWELCC-reduced amount, not the full fee before CWELCC. You cannot deduct the subsidy amount paid by the government on your behalf.

Example: If your full annual daycare cost would be $14,000 but CWELCC covered $11,700 and you paid $2,300, your CRA-deductible amount is approximately $2,300 — not $14,000.

At $10/day for 220 days = approximately $2,200 per child per year at a CWELCC-enrolled centre like Daisy Days Daycare. This is your approximate deductible childcare expense amount.

What You Need: Daycare Receipts for CRA

The CRA requires official receipts from your licensed childcare provider to claim the deduction. A valid daycare tax receipt must include:

• Your full name (the parent claiming the deduction)
• Your child’s full name and date of birth
• The childcare provider’s full name and address
• The childcare provider’s SIN or Business Number
• Total amount paid during the tax year
• The year for which the receipt applies
• Provider signature

Daisy Days Daycare in Regina SK provides official annual tax receipts to all enrolled families. Contact us in January-February each year to receive your 2026 tax receipt.

Who Claims the Deduction — Lower-Income Rule

In most cases, the CRA requires the lower-income earner of a couple to claim childcare expenses on the T778. The higher-income earner can only claim in specific situations (the lower-income earner is in full-time school, has a disability, is imprisoned, etc.). In single-parent households, the parent with the child claims the deduction.

Province vs. Federal — Saskatchewan Has No Additional Childcare Credit

Saskatchewan does not have a separate provincial childcare tax credit — the federal T778 deduction is the primary tax benefit. Saskatchewan families also benefit from the Canada Child Benefit (CCB) monthly payments, which are income-tested but separate from childcare expenses.

→ Full CWELCC savings + tax deduction combined calculator
→ Saskatchewan Childcare Subsidy application guide 2026
→ 2026 daycare cost guide for Regina SK

Need your 2026 daycare tax receipt? Contact Daisy Days Daycare.
306-807-3233 | info@daisydaysdaycare.com | 2007 Potts Crescent East, Regina SK S4V 2E5