If your parents took care of you when you were growing up, you’re likely eager to reciprocate that care now. The great news is that the Canada Revenue Agency (CRA) also wants to show their appreciation. If you have an elderly parent or relative, you might qualify for the Canada caregiver amount. This tax credit is often overlooked but can provide valuable tax savings for Canadians who support infirm or dependent individuals at home.
Understanding Eligibility and Benefits of the Canada Caregiver Amount
To determine if you can claim the Canada caregiver amount, certain criteria must be met. The key requirement is that a family member relied on your support due to a mental or physical impairment throughout the year. This assistance typically involves daily activities such as meal preparation, transportation to appointments, or personal care. It’s worth noting that the relative no longer needs to reside with you for you to qualify for this tax credit.
The Canada caregiver amount extends to various dependents, including your own or your spouse’s:
- Child or grandchild
- Parent, grandparent, sibling, uncle, aunt, niece, or nephew (if they resided in Canada at any point during the year)
If the Canada Revenue Agency (CRA) has already approved a disability tax certificate (T2201) for the individual you’re claiming the amount for, there’s no need for an additional doctor’s note to confirm their condition. Moreover, you have the opportunity to claim any unused disability tax credit alongside the Canada caregiver amount, further maximizing the benefits you’re entitled to.
Claiming the Amount: Understanding the Limits
The amount you can claim depends on the age and relationship of your dependent. If your dependent is 18 years or older and is not your spouse or common-law partner, or the individual for whom you’re claiming the amount for an eligible dependent, you can claim a caregiver amount of $7,276. However, it’s important to note that this amount is reduced by each dollar your dependent’s net income exceeds $17,085. If their income surpasses $24,361, you will no longer be eligible for this credit.
In the case where your dependent is your spouse or common-law partner, you can claim an additional $2,273 to assist with their care.
For dependents under the age of 18, you can claim $2,273 without any reduction based on their net income. This means the amount remains unaffected regardless of their earnings.
Eligibility for the Canada Caregiver Amount and Quebec Tax Credits
When claiming the caregiver amount, it’s important to understand the eligibility criteria and considerations for both the Canada caregiver amount and the Quebec tax credits.
For the Canada caregiver amount, it is no longer possible to claim it for an elderly parent who lives with you but does not have a mental or physical infirmity. This credit is now only applicable if a family member relied on you for support due to a mental or physical infirmity during the year.
Regarding the caregiver amount for a spouse’s mother moving in, it is advisable for the spouse with a higher tax payable to claim this credit. If both spouses reside in the same household, they can choose to claim the credit for all eligible relatives together or each claim separate relatives. However, it’s important to note that each dependent relative can only be claimed once.
In Quebec, there are specific tax credits available for caregivers. The Quebec tax credit for caregivers provides a credit of $1,250 if someone who is at least 18 years old lives with you and relies on you for support due to a severe or prolonged impairment in mental or physical functions. Additionally, you can claim the same credit for someone who is at least 70 years old, does not live with you, and is not your spouse or common-law partner. Unlike the Canada caregiver amount, this credit can be claimed for someone who is not related to you.
Please note that if you are already claiming the Quebec tax credit for volunteer respite services or the Quebec tax credit for respite of caregivers for the same person, you will not be able to claim the Quebec tax credit for caregivers. These specific tax credits are designed for Quebec residents who have provided care for a family member with a long-term disability.