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Tips and tricks for Canadian tax filers at every stage of life from UFile's tax expert Gerry Vittoratos



Quebec - Reduction in additional contribution for subsidized daycares

by Gerry Vittoratos | Apr 05, 2016   Comments:

The Quebec government recently announced a retroactive reduction to the additional contribution for the second child in a subsidized daycare. What does this mean for you? Let’s find out!

Mechanics of the additional contribution

In the 2015 budget, the Quebec government announced that parents who have their children in subsidized daycares (commonly referred to as “$7/day daycares”) would have to pay an additional contribution on their tax returns based on their family income of 2014 (combined net income for both spouses).  

The additional contribution starts at an extra $0.70/day if your 2014 family income is between $50,000 and $75,000. The contribution increases proportionately by 3.9% for every dollar of family income above $75,000, and reaches a maximum of $12.70/day once your family income is $155,000 and above. The contribution is charged on only 2 children that were in subsidized daycares.

The subsidized daycare will emit a specific slip, the RL-30 that indicates the number of days your children were in a subsidized daycare. The total contribution charged as an additional tax on your tax return will be determined by multiplying the number of days on the RL-30 by the daily rate (see above). The contribution is eligible as a child care expense on your Federal tax return.

Reduction in the additional contribution

In the 2016 budget announcement, the Quebec government announced that the contribution will be reduced by 50% for the second child.  In other words, the rate per day for the additional contribution stated above is simply cut in half for the second child.

As announced by Revenu Quebec, no changes will be made to Schedule I, which is used to calculate the additional contribution. You have to file your tax return without considering the new reduction. So when you file your tax return, UFile will charge the full amount of contribution for the second child. Once Revenu Quebec receives your tax return, they will adjust your return and reimburse you the difference. That’s great news!

Now for the bad news: since the additional contribution is eligible as a child care expense on the federal tax return, the CRA will adjust your tax return and reduce your claim for child care expenses. However, the reimbursement from Revenu Quebec should be more than amount you will on federal side.

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