Yes there is a formula but most people use more than a third of their home for the daycare and that is an area where an accountant gets confused as there is an I think 25% limit for a home business but we are not in the same category as someone who has an office in the home that they work from. Most of us use pretty much the entire house at some point in the day by the time kids nap in family bedrooms. The formula takes the space used divided by the total square footage of house times the hours of care used divide total hours (168 hours per week) x total expenses for the house including utilities, insurance, property taxes, mortgage interest, household repairs. That gives you a pretty hefty reduction usually.

Also one of the things to remember is that you can claim a lot of what you already have when you start care that belonged to your own children such as a playpen or highchair they no longer need that you will now use for the daycare. You sell it to yourself the same as if you had bought it at a neighbourhood garage sale. Write yourself a receipt giving date the change in use was made and the amount you are claiming.