Tax Breaks for You and Your Caregivers

Posted by on Apr 3, 2012 in Financial and Tax Matters | 0 comments

With many Canadians caring for aging parents or receiving care ourselves, it’s good to know that there may be federal and provincial tax breaks available to us:

Below are excerpts from the Canada Revenue Agency (CRA) website, http://www.cra-arc.gc.ca, detailing three of the available federal benefits. Click on the links below for more information, and note that these benefits apply not just to the elderly, but to any qualified care recipients over the age of 18, such as adult children.

Caregiver Tax Credit
You may be eligible for this tax credit if you meet ALL of the following conditions:

• You maintained a dwelling where you and a dependant lived at any time during the calendar year.

• Your dependant is:

* your or your spouse’s or common-law partner’s child or grandchild; or

*your or your spouse’s or common-law partner’s brother, sister, nephew, niece, uncle, aunt, parent, or grandparent who was resident in Canada.

• This person was not only visiting you.

• Your dependant meets all of the following conditions:

* 18 years of age or older at the time he or she lived with you;
* Net income in 2011 (line 236 of his or her return, or the amount that it would be if he or she filed a return) of less than $18,906; and
* Dependent on you due to an impairment in physical or mental functions or, if he or she is your or your spouse’s or common-law partner’s parent or grandparent, born in 1946 or earlier.

• You did not have to make child support payments for this dependant.

• No one other than you claims an amount for an eligible dependant (line 305) for that dependant.

Disability tax credit
As per the Canada Revenue Agency website, claimants for the disability tax credit (DTC), must meet the three following conditions:

• The claimant must have an impairment that is prolonged, which means it has lasted or is expected to last for a continuous period of at least 12 months.

• The claimant’s impairment in physical or mental functions must be severe and it must restrict him or her all or substantially all of the time.

• The claimant’s severe and prolonged impairment must be certified using Form T2201, Disability Tax Credit Certificate, by a qualified practitioner.

If your dependant is able to claim the disability amount, and does not need to claim all or part of that amount on their tax return, they may be able to transfer all or part of this amount to you.

Click here for a list of “impairments” that qualify for the Disability Tax Credit:

http://www.cra-arc.gc.ca/tx/ndvdls/sgmnts/dsblts/qlfd-prcts/dtrmnng/menu-eng.html

Finally, if you pay for someone’s nursing home fees, you may be able to claim them under “medical expenses for other eligible dependents –line 331”.

Provincial Tax Credits

It’s worthwhile to check whether your provincial government offers caregiver tax relief as well. You can start by searching online for “caregiver tax credit” together with the name of your province.

Need assistance with your CRA returns?

Consult a tax professional or click on the link to our previous article to learn more about help available for older persons with preparing tax returns.

https://members.elderwise.ca/?q=Tax_Matters_for_Seniors


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