Expert Blog

This is one of the Most Commonly Missed Tax Credits. Can You Claim it?

Posted November 25th 2016

Your parents worked hard to take great care of you growing up and you’re happy to return the favour. The good news? The CRA (the Canada Revenue Agency) wants to say “thanks” too. If you’ve got an aging parent or relative living under your roof, you might be eligible for the caregiver amount. It’s one of the most commonly overlooked tax credits, and it’s intended to create additional tax savings for Canadians supporting aging relatives or a disabled dependant at home, rather than in our healthcare system.

Can I claim the Caregiver amount?

To qualify for the caregiver amount, the relative must live with you, and you need to be responsible for maintaining the home. So, if you’re supporting elderly parents in another way but they aren’t living with you, you wouldn’t be eligible for this credit.

I’m taking care of a family member who needs help, but they aren’t aging. Do I qualify?

If you’re supporting a dependant other than a parent or grandparent, they must be older than 18, earn less than $22,728 annually and depend on you because they’re infirm. If that’s the case, you need a doctor’s note describing the condition. Let’s say your daughter, who is 25, was diagnosed with muscular dystrophy. She would not only be eligible for the Disability Tax Credit (which she could transfer to you), but you could also claim the caregiver amount.

I have a parent living with me, but they’re in good health. Can I claim the caregiver amount?

If the relative that’s living with you is a parent or grandparent and they are 65 or older, you can claim the caregiver amount, even if they’re healthy. For example, say your elderly mother moved in with you, and she earns less than $20,607 during the year. You’d be eligible to claim the caregiver amount for her.

My husband’s mother moved in. Can I still claim the caregiver amount?

It might make more sense for you to claim this amount against your taxes than your husband, and if you’re both in the same household, this is A-OK with the CRA. The caregiver amount is also a credit that can be split, but you can’t claim more than the maximum amount, which at the moment is $4,667 If your Mother-in-law’s income is less than $15,940, you can claim the full $4,667, and if it’s greater than this amount, the credit becomes gradually reduced as income increases.

My wife is 68. Am I eligible for the caregiver amount?

If you’re caring for a spouse, the caregiver amount doesn’t apply, even if the person earns less than the minimum. The Tax Act assumes that spouses will take care of each other through thick and thin, and that includes your golden years. However, if you are eligible for the spouse or common-law partner amount, the amount you can claim is increased by $2,121 if your spouse is infirm.

Wondering what other credits or deductions you might qualify for? Chat with a Tax Expert at an H&R Block office near you. Ready to file? Do it yourself with our free online software.

 

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