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Taxes and Parental Care: Which Expenses Are Deductible (New Rules Take Effect in 2022)?

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When it comes to taking care of family and as a family caregiver, you go into an experience that takes a lot of time. Do you have a growing old dad and mum who want help, financially or physically, to look after themselves? Do you both face the cost of nursing care and other clinical desires?

Monthly nursing home costs can effortlessly increase to tens of hundreds of dollars per step within a year, along with additional caregiving charges. When coping with prices of this significance, you have to recognise which fees are deductible for tax purposes, not only for your mother and father but also for you. For tax returns for 2016 and in advance, the rules differed.

You may not have predicted it to take so much of your money. The average family caregiver spends approximately $7200 per year on family, medical, and different prices related to being concerned for a cherished one.

Fortunately, there’s some light at the end of the tax year: federal tax credits and deductions that imply directly to caregiving amount. These aren’t the only ones that are available to you, so visit a qualified, certified public accountant or economic planner for different alternatives. Here are some ways family caregivers can potentially reduce their tax burden.

There is a tax credit available for your parents.

The motive of this article is to check the tax credits available to you as a person assisting your parents. They’re incurred, including clinical charges (domestic care and nursing care expenses) and the incapacity credit score. For greater records on what credit and deductions are to be had, see the Canada Revenue Agency‘s courses on medical expenses and “Disability-Related Information.” Review this CRA to look out for unusual tax benefits, deductions, and credits available to seniors.

A tax credit will be given to you for taking care of your parents.

[2020-2021 note: from CRA website for the temporary COVID-19 Canada Caregiving Recovery Benefit for the assistance of up to $500 per week for the one who is unable to do work to look after family member because of COVID-19.]

If you are concerned about your spouse or children, even if they’re no longer living with you, there are some credits that you may be capable of declaring on your personal tax return. These can also encompass one or more of the Canada Caregiver Credit for an infirm parent, a transfer of your parent’s unused disability, an eligible dependant credit in the event that they live with you, scientific prices you must pay on their behalf, or home accessibility expenses. There are excellent standards for eligibility for these credits, certainly one of which is that your parents need to be dependent on you, i.e., you have to support your parents. However, certain credits do now require them to stay with you.

Taxes and Caring for Parents (New Rules Effective 2022)

In 2022, you will be able to claim an amount up to a max of $7,348 for individual dependents, only if that person has an impairment in physical or mental functions and is dependent on you or is 18 years of age or older.

You may also be able to claim an amount for more than one person if each one fulfils all the given conditions. The person must have been:

  • The person must be your (or your spouse’s or common-law partner’s) child, grandparent, grandchild, parent, brother, sister, aunt, uncle, niece, or nephew.
  • The one should be 18 years of age or older.
  • Must be dependent on you just because of an impairment in mental or physical functions
  • You can’t claim this payment for the one who was only visiting you. He/she should be a resident of Canada.

More detailed explanation:

The one mentioned in a paragraph on the official website of CRA On line 30450 of the return, you cannot assert an amount for that specific dependant. Moreover, if you or someone else is claiming an amount on line 30300 or line 30400 of the return for the dependant,

If the dependant’s net income (if they filed a return, shown on line 23600 of their return, or the amount it would be) is much less than $24,604, you can claim an amount.

If you had to create a child support payment on line 30450 of your return for that child, you could not claim an amount. However, if you separated for only part of 2021, you may be able to claim an amount for that child because of a breakdown in your relationship on line 30450.

The Canada Revenue Agency can also ask for a signed statement from a medical practitioner indicating when the impairment began and what its period is expected to be.

Salman Rundhawa
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

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