Under the amended Quebec regime for subsidized child care, there is a core contribution of $7.30 per day, per child, which is paid directly for child care, and an additional contribution scaled to family income (of up to $12.70 per day, per child), which is payable to the ARQ when filing income tax returns for 2015 (in the spring of 2016). If the additional contribution is deductible, in what year may it be deducted? For example, would the additional contribution paid in the spring of 2016 in respect of care received in 2015 be deductible in 2015 or 2016? CRA responded:
Child care expenses are deductible provided that inter alia they are in respect of child care expenses incurred for services rendered during the year. Therefore, an Additional Contribution that meets all the requirements for deductibility under subsection 63(1)… as a child care expense may be deducted in computing the taxpayer's income in 2015 if the subsidized child care services were rendered during 2015, even if the calculation of the Additional Contribution is made when the individual's Québec income tax return for 2015 is completed in 2016.
Furthermore…they must be "paid". The CRA will consider that this condition is satisfied at the time of filing of the federal income tax return for 2015 if the additional contribution is paid to the Quebec Minister of Revenue by the due date applicable for that year. [T]he due date is defined in section 88.1 of the Educational Childcare Act….