The Money Management
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Tax Credits, Deductions and Benefits
If you have selected home care, you may be interested in knowing what tax deductions, tax credits or benefits might be applicable. Some of these are available to the "home care patient" while others apply to eligible family members.
In this article, we will examine the Attendant Care Tax deduction, the Caregiver Tax credit and Compassionate Care Benefits. These and other related topics were discussed in my series of articles on Eldercare/CA PrimePlus Services*.
Attendant Care Expenses is a Tax Deduction. It is available to the "home care patient" and cannot be transferred. Attendant Care is care provided by an attendant who performs those personal tasks which the person with a disability is unable to do for him or herself. Such tasks could include meal preparation, feeding assistant, maid and cleaning services, health care (such as registered nurse, practical nurse, certified health care aids, personal support worker), transportation, and personal services, such as banking and shopping.
The maximum amount that is deductible is two-thirds of your "earned income".
There are a number of conditions to satisfy:
If you have no "earned income" and therefore cannot claim a deduction for the Attendant Care Expenses, these can claimed as a Medical Expense Tax Credit (maximum federal tax credit of $10,000 or $20,000 in the year of death). This tax credit can be transferred to your spouse or relative whom you are dependent upon.
In the case of persons who have a severe and prolonged mobility impairment or who lacks normal physical development, reasonable expenses relating to renovations or alterations to the person's dwelling can be claimed as a Medical Expense Tax Credit. To qualify, these expenses must be paid to enable the person to access the dwelling or be mobile or functional within it.
For more details on the Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, refer to the CCRA's Interpretation Bulletin IT-519R2.
The Caregiver Tax credit is available to taxpayers who (alone or jointly)
provide home care for a parent or grandparent (65 or older), or a mentally
or physically infirm dependant age 18 or over. Certain conditions apply
in the case of a dependant age 18 and over. We will not discuss all the
conditions in this article.
The Compassionate Care Benefit is available starting January 4, 2004.
This is not an Income tax deduction or tax credit but is provided under
the Employment Insurance Act.
This benefit can be shared with other eligible caregivers who must also apply. The number of weeks you will share with other members of your family should be decided and agreed amongst each family member at the time you apply. The first person to receive the Compassionate Care Benefit will serve a 2-week waiting period. Under certain circumstances, the 2-week waiting period may be waived or deferred.
Family members include:
Care or support to a family member means:
The basic Compassionate Care Benefit is 55% of your average insured earnings. The maximum is $413 per week. Your EI payment is taxable income. Higher benefits are available to low-income families.
When you file your tax return, you will not have to repay any of the Compassionate Care Benefits. However, if you received Compassionate Care Benefit and regular benefits within the same taxation year, you may be required to repay some or all of the regular benefits.
For more details, refer to the HRDC's web site.
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