Dan and Janet have three children, ages 6, 9, and 17.While Janet was a full-time student at university, January through April (15 weeks), her mother looked after the children. Janet found full-time employment in July. Her 17-year-old son looked after the younger two children during July while Janet worked. In August, the two younger children spent four weeks at an overnight camp in northern Ontario. Janet hired a live-in nanny to look after the children from September through December.
Dan paid all of the child care costs for the year, which totalled $17,600 (Janet’s mother $6,000 + son $1,600 + camp $4,000 ($2,000 per child) + nanny $6,000). Dan is employed full time as a salesman. He received commission income of $125,000 during the current year. He was able to claim sales expenses of $25,000 on this tax return. Janet had the following sources of income in the current year—scholarships $3,000; spousal support from her former spouse $12,000; rental income $8,000, and salary plus taxable benefits $36,000.
Determine the maximum tax deduction for child care available to Dan and Janet for the current year. Income tax reference: ITA 63.