10 Sep 2013

Women often have difficult choices to make with their careers.

When they decide to start a family and have children, they may have to make the choice between staying at home to raise the kids or going back to work to contribute to the family income.

Some moms may not have the choice at all, forced to work to keep the home’s finances in order.

If her employer is in a position to do so, he could reap benefits from creating childcare spaces. That way, Mom can go back to work and tend to her child’s needs.

Businesses are eligible to claim the Canada Revenue Agency’s Investment Tax Credit if they are not in the business of child care. Owners can claim the lesser of $10,000 or 25 per cent of the eligible expenses per child-care space created. The child-care spaces must be in new or existing licensed child-care facilities and can be available for children of employees or other children.

Eligible expenses can include:

  • The building where the child-care spaces are located
  • Furniture and appliances
  • Playground structures and equipment
  • Startup costs such as building permits, architect fees and regulatory inspections

The eligible expenses may not include ongoing expenses such as staffing wages, supplies and utility costs.

How do I claim this tax credit

The tax credit for supplying child-care spaces is claimed as the Investment Tax Credit, which we discussed in our post about credits for hiring employees and the Apprenticeship Job Creation Tax Credit.

The Investment Tax Credit also applies:

  • To the purchase of new buildings, machinery or equipment for such activities as farming, fishing, logging, manufacturing or processing, but only in certain areas of Canada
  • To unclaimed credits earned in the last 10 years
  • If you received a T-3 slip showing an amount in Box 41
  • If you received a 2008 version of a T-5013 with an amount showing in Box 107, or a 2004 version with an amount showing in Boxes 38 or 138
  • If you have received a T-5013A slip with an amount showing in Boxes 107 or 128
  • If you have received a T-101 slip with an amount showing in Box 128
  • If you have a partnership financial statement that allocates to you an amount that qualifies for this credit
  • If you have an investment in a mining operation that allocates certain exploration expenditures to you

You must complete Part A of Form T-2038(IND) and enter the amount of your credit on Line 412 of Schedule 1 of your income tax return.

You can carry back any unused credits three years or carry them forward 20 years.

Here to help

A1 Accounting, a Calgary accounting and bookkeeping firm, is here to assist you with your taxes and planning. We specialize in personal taxes and small-business accounting and financial services. Contact one of our tax specialists and we can help you optimize the tax benefits and credits available to self-employed individuals and small businesses.

Fill out our contact form or give us a call at 403-226-8297.

Follow along

The Canada Revenue Agency has an active Twitter account. If you’re interested in following the account, you can the CRA at@CanRevAgency.

And don’t forget us! We’re on there, too, talking about taxes and business, especially for small businesses and entrepreneurs. Find us at @A1Acct. While you’re at it, like us on Facebook