Jennifer and Vincent have a 1-year-old daughter in reduced-contribution childcare. Their annual family income is $100 000. In 20152016, given the adjustment of childcare rates according to income, the cost of a childcare space is $11.4111.54 per day in their case. However, taking the Québec and federal tax systems into account, it will cost Jennifer and Vincent $9.099.26 per day to send their daughter to reduced-contribution childcare.
If they had decided to send their daughter to childcare at the regular rate of $35 per day, their net cost, taking the Québec and federal tax systems into account, would have been $9.009.61 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 child care expenses 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 in the form of a reduction in source deductions.