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Form T778 · Line 21400

T778 Worksheet: Estimate Your Child Care Expense Deduction (Line 21400)

Form T778 is how Canadian parents calculate the federal child care expense deduction before reporting it on Line 21400. This free interactive worksheet estimates that amount for household and nanny employers (eligible children, who claims, wages, and employer CPP/EI), then unlocks a Parts A-D prep sheet. It is not the CRA fillable form.

Get the official CRA T778 form here: CRA Form T778 · Line 21400

Tax year and eligible children

The $8,000 / $5,000 / $11,000 limits are set in the Income Tax Act (s.63) for 2015 onward. Choose the tax year you will file.

Eligible children

Age is at the end of the tax year. A child eligible for the disability tax credit uses the $11,000 amount instead of the age band.

Informational estimate only. Not tax advice. Not CRA Form T778. Actual Line 21400 depends on your full return and the official form for the selected tax year.

What is Line 21400 on a tax return?

Line 21400 on a Canadian tax return is where you claim the allowable child care expense deduction. CRA Form T778 (the official form) calculates that figure; this RoostPay tool estimates the same Line 21400 result so you can prep before you open tax software or the CRA PDF.

Your allowable deduction is generally the lesser of (1) eligible amounts you paid, (2) the Part B basic limit for your children, and (3) two-thirds of the claimant's earned income. That lesser-of-three rule is in Income Tax Folio S1-F3-C1 and on CRA's Line 21400 how-to-claim page .

Deduction vs. tax credit

Line 21400 is a tax deduction, not a tax credit. It reduces your taxable income (so the dollar value depends on your marginal tax rate), rather than paying a flat refundable percentage. Quebec residents still use Form T778 for the federal return, but claim separate provincial child care relief through Schedule C and RL-24 slips.

Part C of Form T778 (higher-income claimants)

Part C of Form T778 matters when the higher net-income spouse or common-law partner needs to claim. That is only allowed in limited situations (school, infirmity, prison, or a narrow separation-and-reconciliation rule). Part C also applies a weekly cap: the periodic amount (annual Part B limit ÷ 40) times the number of qualifying weeks.

In this worksheet, choose the higher-income claimant role, pick the Part C situation that applied, and enter qualifying weeks. The estimate shows the Part C weekly cap beside eligible paid, the Part B basic limit, and two-thirds of earned income, so you can see which limit binds before you fill the CRA T778 form.

Who this T778 worksheet is for

This tool is built for Canadian household employers: families who pay a nanny or caregiver on the books and need year-end payroll documents (T4, remittance statements, shift logs) ready for Form T778. It is not a full T1 tax engine, and it is not generic tax software marketing.

For nanny households, eligible paid usually includes gross wages plus the employer share of CPP and EI when those wages themselves qualify. That treatment is supported by CRA technical interpretation 2016-0654751I7, which treats the employer share of CPP and EI as eligible under section 63 when the underlying wages qualify as child care expenses. Keep PD7A or My Business Account remittance records, because T4 Box 14 shows gross wages only. Subtract care that was not to enable work, business, school, or grant research (date nights, personal travel). Room and board for a live-in caregiver is not a child care expense.

Model monthly employer costs with the Canadian nanny tax calculator and read the full filing walkthrough in our CRA Form T778 nanny tax deduction guide .

How the T778 worksheet works

  1. Choose the tax year and add eligible children (age band or disability tax credit).
  2. Say who claims Line 21400: lower-income partner, sole claimant, or higher-income with Part C weeks.
  3. Enter care costs: nanny wages and employer CPP/EI, or daycare/day camp fees, plus any overnight camp weeks.
  4. Review the Line 21400 estimate and the binding limit (eligible paid, Part B, two-thirds earned income, or Part C).
  5. Unlock the Parts A-D prep worksheet to map numbers onto the official CRA Form T778.

T778 child care expense limits (2015 and later)

These Part B basic limits are set in the Income Tax Act and are not indexed. Confirm against the CRA T778 for your filing year.

Child category Annual limit Periodic (÷ 40)
Under age 7 at year-end $8,000 $200 / week
Age 7 to 16, or infirm 16+ without DTC $5,000 $125 / week
Eligible for the disability tax credit (any age) $11,000 $275 / week

The disability tax credit amount replaces the age-band amount for that child. Higher-income Part C claimants also face the weekly periodic cap times qualifying weeks.

Disclaimer: This is an informational Line 21400 estimate only. It is not tax advice and is not CRA Form T778. Do not use these figures for an official filing. Complete the official T778 (or use tax software) and keep receipts.

Keep T778-ready nanny payroll all year

The April scramble usually comes from missing remittance statements and mixed personal shifts. Automated Canadian nanny payroll software like RoostPay is built so eligible wages, employer CPP/EI, and T4 totals are ready for your accountant. See the in-app T778 child care expense report for how year-end export will work after launch, or start your free 30-day trial for year-round T778-ready household payroll.

Start free 30-day trial

Frequently asked questions

What is Form T778?
Form T778 is the Canada Revenue Agency form used to calculate the federal child care expense deduction. The allowable amount flows to Line 21400 on your T1 return. It is a deduction that reduces taxable income, not a refundable tax credit. Provincial programs (for example Ontario CARE) are separate.
What is Line 21400 on a tax return?
Line 21400 is where you report the allowable child care expense deduction calculated on Form T778. You can only claim expenses for services provided in that tax year. Unused amounts cannot be carried forward.
What is Part C of Form T778?
Part C applies when the higher net-income spouse or common-law partner claims child care expenses. That is only allowed in limited situations (for example the lower-income supporting person was in school, incapable of caring for the children, confined to prison for two or more weeks, or a narrow separation-and-reconciliation rule). Part C also caps the claim using a weekly periodic amount times the number of qualifying weeks. This worksheet estimates that cap when you select a higher-income claimant and enter weeks.
Can I use this instead of the CRA T778 PDF?
No. RoostPay does not host or clone CRA's fillable T778 PDF. This page is an interactive year-end worksheet that estimates Line 21400 and maps your numbers to Parts A-D for prep. Download the official CRA Form T778 (or use tax software) to file.
Can I include nanny employer CPP and EI on Form T778?
Yes, if the underlying wages qualify as child care expenses. CRA technical interpretation 2016-0654751I7 treats the employer share of CPP and EI as eligible. Keep PD7A or My Business Account remittance records, because T4 Box 14 shows gross wages only.
Who claims Form T778 and Line 21400?
If you lived with a spouse or common-law partner, the person with the lower net income generally must claim. The higher-income person may claim only when a Part C situation applied. A sole parent with no supporting person claims their own expenses.
What are the T778 dollar limits for 2025 and 2026?
The Income Tax Act amounts for 2015 and subsequent years are $8,000 per child under 7, $5,000 per child aged 7 to 16 (or infirm 16+ without the disability tax credit), and $11,000 per child eligible for the disability tax credit. These amounts are not indexed. CRA has published Form T778 for 2025. For 2026, the same statutory limits apply until Parliament or CRA updates them.
What receipts do I need for Line 21400?
Keep receipts showing the provider's name and, for an individual, their social insurance number (or a business number for an organization), the amount paid, and the period of care. Also keep the nanny T4, payroll remittance statements, and a log of which shifts enabled work, business, school, or grant research. CRA can ask for records for six years. Do not mail receipts with an online return.