Caregiver tax guide: Your caregiver tax credit questions, answered
Our caregiver tax refund series continues! So far, we’ve talked about the difference between tax credits and deductions, and demystified the Canada Caregiver Credit. You may now be wondering, what are the tax credits that caregivers tend to overlook?
Glenn Hayter, Certified Financial Planner with Hayter and Associates Inc., answers some of the most common to get his insights on the credits that may apply to you!
I support someone who is living with dementia. How do I qualify for the Canada Caregiver Credit?
The most important piece of the puzzle is to obtain a Disability Tax Certificate.
“The Disability Tax Certificate should be obtainable from one of the doctors involved with your parent,” explains Hayter, “The best one is the family doctor but some family doctors are reluctant to sign the DTC so the caregiver may have to go to a specialist for help.”
As of March 22, 2017, Nurse practitioners can also certify the Disability Tax Certificate.
Seniors who are living with dementia and who reside with their adult children will continue to qualify for the new Canada Caregiver Credit, as long as they obtain a Disability Tax Certificate.
If the senior does not qualify for the credit, then there is no credit available to the supporting person.
How far back can I claim caregiver tax credits?
While there may be a charge for completing the form by a family doctor, or a larger fee if a specialist involved, Hayter suggests that in the end, it will likely pay to have the form completed.
“The tax credits for the CCC are substantial each year. As well, it is possible to go back 10 years to claim the DTC credits from the prior years if the DTC starts in a prior year.”
Does a dependent have to live with a caregiver to receive tax credits?
The good news is the senior does not have to live with you for you to be eligible but has to be dependent upon you for “support”.
“Support” is typically defined as providing food, clothing, or shelter to the dependent person.
“Canada Revenue Agency (CRA) has a special form that you have to fill out detailing the support that you are providing,” explains Hayter, “In the past, it was not necessary to maintain records of the “support” but lately CRA is requesting proof of payment of the support of the dependant. We always suggest that the supporting person maintain a journal of the support provided and keep the receipts of the purchases made for clothing, food or rent.”
Can the Canadian Caregiver Credit be split between caregivers?
“The credit can be split between supporting individuals but this will not be simple when it comes to actually filing tax returns and claiming the credit,” suggests Hayter, “Since this is a credit against taxes owed, the simplest way to claim the credit would be for one person (with adequate taxable income) to claim the credit and then divide the refund generated by the credits with the other supporting person or people.”
What tax credits do Canadian caregivers tend to overlook?
One tax credit that is frequently overlooked by caregivers will be the mileage claim associated with trips to medical appointments and support programs.
Begin to keep records of mileage, including receipts, now for your 2018 tax refund!
Here are some tips about accessing this credit:
- If a person goes more than 40 kilometer one way to obtain medical help, then the mileage can be claimed both ways at 54.5 cents per kilometer. This can add up to be a sizeable amount of money in a 12 month period!
- If the distance is over 80 km, then there are potential meal claims at $17.00 per meal.
- Is your family member involved in a day program? “I expect that mileage associated with day programs could be a medical expense if the doctor has prescribed the treatment and specified that the patient could not drive himself/herself and needed someone to drive them to the treatment.”
This is the last of our three part caregiver tax refund series. If you missed the previous blogs you can find them here::
- Caregiver tax guide: What’s the difference between a tax credit and tax deduction?
- Caregiver tax guide: The Canada Caregiver Credit – What’s New?
We sincerely hope that this three part series helps to give you some insights into how caregivers can access tax credits in Ontario! What other tax refund questions or resources do you have? Get in touch through email at firstname.lastname@example.org, on our Facebook page or on Twitter! We’d love to hear from you.
Written in consultation with:
Glenn Hayter of Hayter and Associates Inc.
The Alzheimer Society suggests that you seek professional advice to answer any specific questions about your tax situation.