This is one of the most commonly missed tax credits. Can you claim it?
February 18, 2021
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, you might be eligible for the Canada caregiver amount. It’s one of the most commonly overlooked tax credits, and it’s intended to create additional tax savings for Canadians supporting infirm or dependants at home, rather than in our healthcare system.
Can I claim the Canada Caregiver amount?
To be eligible for the Canada caregiver amount, the relative must be dependent on you by reason of mental or physical infirmity. If that's the case, you need a doctor's note confirming the condition. It used to be a requirement that the relative lived with you, but this is no longer the case.
If your dependant has Form T2201 on file with the CRA, you can claim their unused disability tax credit in addition to the Canada caregiver amount.
Does it matter how old they are?
If the dependant is 18 or older you can claim $7,276 less their net income in excess of $17,085. This means that the amount is reduced to zero if their income is in excess of $24,361. If the dependant is under 18, you can only claim $2,273. However, the amount is not reduced by their net income.
I have a parent living with me, but they’re in good health. Can I claim the caregiver amount?
It used to be that you could claim a caregiver amount for a parent 65 or older regardless of their state of health. This is no longer the case. You can only claim them under the same rules as for other dependants 18 or over, which means that they must be dependent on you by reason of a mental or physical infirmity.
My husband’s infirm mother moved in. Who can 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 $7,276 If your Mother-in-law’s income is less than $17,085, you can claim the full $7,276, 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 your spouse is infirm, the Canada caregiver amount consists of a supplement of $2,273 to the spouse or common-law partner amount.
The amount you can claim for the spouse or common-law partner amount now depends upon your net income. If your net income is less than $150,473, your spouse or common-law partner amount is $13,229. This means that you’ll receive $15,502 if you’re eligible for the Canada caregiver supplement.
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