Morgan Ulmer CFP®

Morgan Ulmer CFP®

Certified Financial Planner® professional

Morgan joined the team in February, 2019 with 8 years of financial planning and financial literacy training under her belt. She is as comfortable working on complex financial planning engagements as she is helping young adults understand budgeting and debt management.

For 15 years, I worked part-time while raising kids. As any married or common-law working couple knows (or at least finds out at tax time), it is the lower income partner who must claim the child care expenses. We were no different. This rule really reduces the dollar value of the child care tax credit.

There are exceptions that allow the higher-income spouse to deduct child-care expenses. These are if the lower income spouse was any of the following during the year:

  1. Mentally or physically infirm
  2. In prison
  3. A student enrolled in a qualifying educational program

Fortunately, in our case, the third scenario applied, and I was the student.

In years where I was enrolled in qualified educational programs (which I usually did online), my spouse was eligible to claim part of our child care expenses. Qualified institutions provide students with a T2022A slip that clearly outlines the number of part-time and full-time months that the student was enrolled.

When completing our taxes, for fun I tested the difference between:

  • Deducting the full childcare amount from my income and
  • Deducting the allowable childcare amount from my spouse’s income

The result? A sizeable decrease in our combined taxes owing. In fact, it was almost enough to have paid for the education itself! And I was enhancing my career at the same time. 

The lesson

In summary, when you are:

  • in a lower tax bracket than your partner and
  • have childcare costs

then investing in your own education is not only wise, it’s tax-wise too!  

These CRA links provide comprehensive information on the Child Care Expense Deduction and Qualified Educational Programs.

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This information is of a general nature and should not be considered professional advice. Its accuracy or completeness is not guaranteed and Queensbury Strategies Inc. assumes no responsibility or liability.

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