Jennifer and Vincent have a 1-year-old daughter in reduced-contribution childcare. Their annual family income is $100 000. In 2015, given the adjustment of childcare rates according to income, their childcare cost is $11.41 per day. However, taking the Québec and federal tax systems into account, it will cost Jennifer and Vincent $9.09 per day to send their daughter to reduced-contribution childcare.
If they decided to send their daughter to private childcare at the regular rate of $35 per day, their net cost, taking the Québec and federal tax systems into account, would be $9.00 per day, an amount comparable to the cost of a reduced-contribution childcare space.
Jennifer and Vincent may choose to claim the Québec refundable tax credit for childcare expenses and the federal deduction on their income tax return or during the year, as the Québec tax credit can be paid in advance and the federal deduction can be claimed by means of a reduction in source deductions.