Important tax tips for Canadian caregivers

December 15, 2014

If you're caring for a dependent loved one or family member, you could be eligible for tax credits that could save you money on your tax return.

Important tax tips for Canadian caregivers

Caregivers in Canada

Caregivers play a vital role in Canada. Caregivers help their family members and loved ones deal with chronic health conditions, disabilities or aging so they can maintain the best quality of life possible.

In 2012, there were eight million Canadians providing care to a chronically ill or disabled friend or loved one.

Programs and tax initiatives to help caregivers

Being a caregiver can be a demanding job. A caregiver has to balance the demands of their life, such as work and children, with the responsibilities of caring for a dependent.

  • As our country continues to age, the role of caregivers will become increasingly important. That’s why the government has introduced a number of programs and tax initiatives to help caregivers shoulder the financial burden.

Family Caregivers Tax Credit

If you’re  caring for someone with a disability or illness, you can claim certain tax credits when you file your tax return, such as the Family Caregivers Tax Credit.

  • These tax credits are non-refundable. A non-refundable tax credit reduces the federal income tax you have to pay each year.
  • In 2014, eligible caregivers could claim up to $2,040 (this amount fluctuates year to year based on inflation) with the Family Caregivers Tax Credit under one or more of the following categories:

- Spouse or common-law partner amount (if his or her net income is less than $11,038).

- Amount for an eligible dependent.

- Amount for children born in 1996 or later.

- Caregiver amount.

Eligible dependents

  • Eligible dependents can be of any age.
  • They must be a resident of Canada and have a prolonged or indefinite impairment of their physical or mental functions.
  • To qualify you have to submit a signed statement from a medical practitioner showing when the impairment began and what the duration of the impairment is expected to be.
  • You can claim the Family Caregivers Tax Credit for more than one eligible dependent (example: if you are caring for a parent and a child).

Medical expenses

Caregivers can also claim the medical expenses they, their spouse or common-law partner paid for a dependent.

  • So make sure you keep all your medical receipts.

Many caregivers are eligible for financial support

In 2012, only seven per cent of caregivers received help from a government program and five per cent received federal tax credits, such as the caregiver tax credit, infirm dependent tax credit and medical expense tax credits.

  • But many more caregivers are eligible for financial support.

Consulting an expert

If you are able to claim the caregiver tax credit, and the dependent is eligible for the disability tax credit, any unused portion of this credit may be transferable to you.

  • If you cannot claim the caregiver amount because the dependent’s income is too high, you may still be able to transfer any unused portion of the disability tax credit.
  • So when it comes time to file your tax return, make sure to consult an expert to find out about all the different tax credits you may be eligible for.
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