July 13, 2017
All Tax Articles

Until recently, there were two different tax credits that applied in similar situations: the in-home caregiver credit and the infirm dependant credit.

You could claim the in-home caregiver credit if a related infirm dependent 18 years or older was dependent on you and lived with you. A credit was also allowed if your non-infirm parents or grandparents lived with you and were 65 or over.

You could claim the infirm dependant credit if a related infirm dependent 18 years or older was dependent on you. However, unlike the caregiver credit, the dependant was not required to live with you.

Both of these credits were discussed in detail in our April 2017 Tax Letter. Both credits were repealed by the 2017 Federal Budget and replaced with one new "Canada caregiver credit", applicable to 2017 and subsequent years.

The new Canada caregiver credit applies where you have a related dependant 18 years of age or older who is dependent on you by reason of mental or physical infirmity. The credit amount is the same amount as the former credits (increased in 2017 because of inflation indexing, as happens automatically every year). The credit uses the higher income threshold of the former in-home caregiver credit; the credit is phased out when the dependant's income exceeds $16,163 (2017 amount). Like the former infirm-dependant credit, this credit applies regardless of whether the dependant lives with you. However, unlike the former in- home credit, this credit does not apply in respect of non-infirm senior parents or grandparents.

This letter summarizes recent tax developments and tax planning opportunities from a third-party affiliate; however, we recommend that you consult with an expert before embarking on any of the suggestions contained in this blog post, which are appropriate to your own specific requirements. Please feel free to get in touch with Lee & Sharpe to discuss anything detailed above, we would be pleased to help.
Douglas K. DeBeck

Hello, my name is Douglas K. DeBeck, I am a partner at Lee & Sharpe.

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