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, CRA 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.
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:
- 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.
- 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.
- 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.
Contact S & M Tax Services to get you all tax credits.