Prepare yourself for tax time by learning what deductions you’re eligible for when taking care of a loved one
By Matt Smith
Caring for an ailing family member is hard enough without the financial strain it can involve, so anything that can help reduce that budgetary burden is invaluable. According to a poll conducted for CIBC this past summer, more than a third of Canadian caregivers spend an average of $430 a month on their loved ones, and 76% say the cost has meant cutting back on expenses, saving less, having to spend some of what their savings, or all of these. However, many are missing out on tax credits that could lighten the load. Here’s an overview of the tax credits available to Canadian caregivers:
Canada Caregiver Credit
In 2017, the Canada Revenue Agency (CRA) combined the caregiver credit, the family caregiver credit, and the infirm dependant credit into the canada caregiver credit (CCC). For the most part, eligibility for these now-bundled credits remains the same as in previous years. If you’re taking care of a spouse or partner, child, grandchild, parent, grandparent, sibling, aunt, or uncle, then you may well be eligible for this credit.
Note that while in previous years you were able to claim credits for living with a parent or grandparent 65 or older, you’re now able to do so only if he or she is deemed infirm. You’ll need to supply medical documentation when you file your taxes. Unlike previously, however, you’re still eligible for this credit if your dependant doesn’t live with you.
Depending on that person’s income and your relationship to him or her, the CCC can allow you to claim $2,182, plus an additional maximum of $6,883.
Disability Tax Credit
Those caring for a relative with a permanent disability are also eligible for the disability tax credit (DTC). Depending on the probvince or territory, this can range from $1,500 to $2,700 in combined federal and provincial tax relief. As with the CCC, you’ll need to provide certification from a qualified medical professional that the person you’re supporting meets the criteria. (It is, in fact, the person requiring care who qualifies for the credit, but the credit can be transferred to a caregiver.)
The home accessibility tax credit (HATC) may be available to you if home renovations are required to address your dependant’s needs. This can cover up to $1,500 per person, per year. The renovations have to be permanent, however, and to be for the purpose of accommodating someone who is either eligible for the DTC or 65 or older.
The non-refundable medical-expense tax credit (METC) can be used to reduce taxes owed. A taxpayer can claim the credit for his or her out-of-pocket medical expenses totalling $2,302 or 3% of net income, whichever is lower, or a caregiver can claim the expenses of a dependant. In addition to medication and material, you can also use this credit to claim fees paid to an attendant or in-home medical professional. This doesn’t apply if these services are performed by a spouse or common-law partner, however.
As with these other tax credits, the person receiving medical treatment doesn’t have to live with you, and you may be eligible to claim fees paid for treatment in a nursing home or long-term care facility, as well.