Do both parents have to be working to claim daycare costs?

Not Necessary. As per the Canada Revenue Agency (CRA): "The person with the lower net income (including zero income) must fill out parts A and B and claim the child care expenses unless one of the situations in Part C or D applies", Form T778, Child Care Expenses Deduction for 2021. Here are exceptions in specific situations where higher-income persons claim the expenses:

• If the lower-income person was attending school for a full-time or a part-time educational program,
• If the lower-income person had an impairment or was sick and confined in a hospital bed for at least two weeks,
• If the lower-income person was confined in prison for at least two weeks, or
• If both supporting parents were living separately by the end of the tax year due to a breakdown in the relationship

For more information, please see the TurboTax article: T778 Tax Form: Child Care Expenses Deduction 

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