The Caregiver’s Return – Tax Deductions And Credits

Imagine this true-to-life situation: A single daughter brings her stricken mother into her home to care for her after she has suffered a stroke.

There is substantial emotional and economic burden, as the heart-broken daughter must work part-time, at least in the first phase of her new life as caregiver. Fortunately, she will find that several tax preferences will open up for her to help save money, especially if she takes the time to consult with her tax pro. The following provisions should be discussed in that meeting:

Amount for Eligible Dependant. As a single person caring for an infirm dependant in her home, a daughter becomes eligible for this “equivalent to spouse” credit if her mother’s income is under $13,078. The amount claimable on Line 305 is $13,078 less the amount of the net income.

Amount for Infirm Adult Over 18. This credit is generally not as lucrative as the Caregiver Amount, discussed below, because the net income threshold for the dependant is lower. However in this case, the dependant does not have to live with you. You could claim it if you are the supporting individual and the infirm person is living in their own home, hospital, or nursing home. Also, another person, perhaps a sibling could also make this claim so long as those making the claim split it between them.

Caregiver Amount. If you provide care for an infirm dependant in your home, you may be eligible to claim the Caregiver Amount if your dependant’s net income is less than $21,864.

For 2013, the maximum claim for the Caregiver Amount is $4,490 if the dependant is not infirm. This definition refers to situations where children look after their parents, age 65 or older, who are not infirm. If the dependant is infirm, the claim is $6,530.

In either case, the claim is reduced by the dependant’s net income in excess of $15,334. Your tax software will do this in the background.

Disability Amount. Claim this first on the return of the disabled adult; it can then be transferred to a supporting individual, including the spouse.

For those supporting a disabled minor, this amount is enhanced by an indexed supplement of $4,490. This amount is reduced by amounts claimed under child care expenses on Line 214 and the disability supports deduction on Line 215 in excess of $2,630. Your software will usually calculate this in the background but be sure that all of the information is available. For example, if child care is being claimed by someone else, your software will not know this automatically.

Remember: Some provinces also provide tax relief for the care of disabled persons. For more information, make an appointment with a DFA-Tax Services Specialist.