CAREGIVER, SPOUSAL AND EQUIVALENT-TO-SPOUSE CREDITS
There are certain tax credits that you can claim when you support another individual and/or the other individual lives with you.
One credit is the spousal credit, which you may be able to claim if your spouse (or common-law partner) does not have a significant amount of income. The credit recognizes that you are likely supporting your spouse if he or she has income below a certain threshold. For 2018, the federal credit is 15% x ($11,809 minus your spouse’s net income). Thus, you get a credit only if your spouse’s net income is less than $11,809. If your spouse is dependent upon you because of a mental or physical infirmity, his or her net income threshold for these purposes is increased by $2,182 to $13,991. (These figures are indexed annually to inflation.)
Another credit is the eligible dependant credit, sometimes called the equivalent-to-spouse credit because the amount is the same as the spousal credit. You can claim this credit if you are single, and support a relative who lives with you who is either an individual under 18, your parent or grandparent, or a person who is dependent upon you because of a mental or physical infirmity. As noted, the amount of the federal credit is exactly the same as the spousal credit, and for the net income threshold you use the net income of the dependant.
A third credit is the Canadian caregiver credit. You can claim this credit if a relative 18 years or older is dependent upon you because of a mental or physical infirmity. The dependant does not have to live with you. You can claim this credit whether you are single or married. The federal caregiver credit is 15% x ($6,986 minus (dependant’s net income over $16,405)). So the credit is phased out gradually if the dependant’s income exceeds $16,405.
As one might appreciate, in some cases, two of these credits could apply in respect of one person that you are supporting. For example, if you are single and support your 20-year child who lives with you and is dependent upon you because of an infirmity, both the equivalent-to-spouse credit and the Canadian caregiver credit could potentially apply. However, an ordering rule provides that you must claim the spousal equivalent credit rather than the caregiver credit (a similar rule says that you must claim the equivalent-to-spouse credit rather than the caregiver credit, if both otherwise apply). Obviously, if only one credit applies in any event, you can only claim that credit.