If you’re supporting a family member with a disability, the extra financial responsibility of being a caregiver can have a big impact on your budget. To help offset some of the cost, the Canada Revenue Agency has introduced the Canada Caregiver Amount. If you qualify, you could be in line for a tax break. Here’s what you need to know about the Canada Caregiver Amount.
Out with the Old
The Canada Caregiver Amount replaces three credits:
- The Caregiver Amount,
- The Amount for Infirm Dependants (18 & older), and
- The Family Caregiver Amount.
The rules for claiming each of these credits were very different from each other. For example, the Caregiver Amount required that the person you were supporting must live with you while the Amount for an Infirm Dependant did not. The Family Caregiver Amount was the only one of the three available for children until 18.
Now, with the Canada Caregiver Credit, figuring out if you qualify for a tax credit is much simpler. There’s only one set of requirements; either you qualify or you don’t.
The Canada Caregiver Amount brings three main changes:
1. The dependant you’re supporting must be “infirm”.
This means that your family member must be dependant upon you due to a physical or mental condition or “infirmity”. In the past, if you lived with a parent or grandparent over the age of 65, you were eligible for the former Caregiver Amount, even if the senior wasn’t “infirm”. That’s’ no longer the case.
2. The dependant doesn’t have to live with you.
This is good news to all the caregivers whose help allows family members to stay in their own homes. If your disabled sister lives nearby but you assist with day-to-day chores like grocery shopping or paying bills, your help could earn you a tax break.
3. Partial credit is available if your dependant’s income is too high.
Previously, if your dependant’s income was over $14,000, you may have been excluded from claiming any tax credits. The Canada Caregiver Amount features a more generous income limit ($16,163) for the full credit and partial credit for incomes up to $23,046.
Do I Qualify for the Canada Caregiver Amount?
If you’re caring for a low-income family member with an infirmity, there’s a good chance you qualify. There are two base amounts for the Canada Caregiver Amount – $2,150 and $6,883. How much credit you can claim depends on the dependant’s relationship to you, what other credits you’re claiming for them, and their income level.
If your spouse is infirm, the amount of your Canada Caregiver Amount depends on their income. First, the $2,150 figure is added to the usual spouse amount. If your spouse’s income is zero, you’ll claim the total of the spousal amount and the $2,150. If your spouse’s income is too high to claim the spousal amount, you still may qualify for the Canada Caregiver Amount. A “top-up” calculation is used for higher incomes so if your spouse earns less than $23,046, you will receive partial credit. Similar rules apply if you’re claiming the Eligible Dependant Credit for a child under 18.
If your infirm dependant is a family member other than your spouse or minor child, the full amount of $6,883 may be claimed if your relative’s net income is below $16,163. If your relative’s income is between $16,163 and $23,046, a partial credit can be claimed.
If your minor child is infirm and you are not claiming the Eligible Dependant Credit for them, you’ll claim $2,150 for each qualifying child.
If your parent or grandparent is over 65 but is not infirm, you do not qualify for the Canada Caregiver Amount.
Canada Caregiver Amount FAQs
If I pay support for my infirm dependant, can I claim the Canada Caregiver Amount?
- If you are required to pay support for the dependant, you cannot claim the Canada Caregiver Amount.
Can I split the Canada Caregiver Amount with another person?
- If more than one person cares for the infirm dependant, the credit can be shared. The maximum amount of $6,883 still applies.
What proof of infirmity is required?
- A signed statement from your dependant’s doctor or practitioner may be required by the Canada Revenue Agency. The statement should contain details on the infirmity as well as when the infirmity began and how long it is expected to last. If your dependant already has an approved Form T2201 – Disability Tax Certificate – on file with CRA, no additional paperwork is needed.