Tax Credits for Caregivers

One-third of Canadians currently provide caregiving support or expect to in the next five years yet an estimated 85 per cent of them are leaving money on the table in possible tax breaks.

Providing care for someone you love can be a rewarding experience, yet it can also be very costly. Many of these caregivers are making personal financial sacrifices and are often cutting into their own savings to provide this care.

Canadians who provides care to a loved one are doing so at an average cost of $430 per month. This figure is also expected to increase dramatically over the next decade as well.

So why are these caregivers not claiming the tax credits available to them?

The number one reason seems to be a lack of understanding. The federal government has recently added to this confusion by changing the names of previous tax credits in order to present them as new features they introduced.

Another big reason for not claiming is the perception that these tax credits are too small and not worthwhile to apply for. Hopefully articles like this will help spur more Canadians to at least look at these tax breaks.

So what tax credits should you be looking into?

  • The Credit for Caregivers has a basic maximum amount of $6,986 on which you can claim a 15 per cent non-refundable federal tax credit for expenses incurred while caring for certain family members with a physical or mental infirmity. In some cases, this credit can be shared by multiple caregivers supporting the same individual.
  • The Medical Expense Tax Credit allows you to partially deduct out-of-pocket medical expenses and can be claimed by yourself or a family member that cares for you. This credit allows for expenses that exceed the lower of $2,302 or three per cent of one’s net income.
  • The Home Accessibility Tax Credit is a non-refundable credit worth up to $1,500 per year to complete renovations required to accommodate your needs.
  • The Disability Tax Credit has certain medical requirements to meet eligibility that include an impairment that lasts or is expected to last at least 12 months and a doctor will need to provide documentation to confirm eligibility. If qualified, the non-refundable credit is worth between $1,500 and $2,700 depending on which province you live in and may also make you eligible for a Registered Disability Savings Plan which carries additional government grants and benefits.

The cost of caring for aging parents alone is estimated at $33 billion annually in direct and indirect costs that range from parking to reduced hours at the caregiver’s regular job. This figure doesn’t include costs of care for a spouse, child, grandparent, aunt or uncle. If you are the provider or receiver of care in Canada, take the time to figure out what tax credits are available to you.