Elderly Woman by Peter Griffin
The number is large and continues to grow: according to Statistics Canada, approximately 2.7 million Canadians provide unpaid care for people 65 or older. Today more than ever, many Canadians are caring for both elderly parents and their own children. Known as the “sandwich generation,” people in this situation can find it difficult to manage the often-conflicting demands of raising children and caring for aging parents or other relatives.
Fortunately, there may be a little relief this tax season. Starting on the 2012 tax return, the Family Caregiver Amount will provide an additional amount up to $2,000 for those looking after family members who are unable to care for themselves.
Age, income and living situation are the deciding factors for determining a caregiver for tax purposes. If your parent or parents are 65 or over, have less than $19,435 in income and are living with you, you can claim the caregiver amount. You can also claim parents under the age of 65 if they are dependent on you due to an infirmity. Cleo Hamel, senior tax analyst with H&R Block, provides further insight for the sandwich generation:
- File tax returns: Your parent or parents should still file their tax returns to take advantage of tax credits and deductions. Also, if they qualify for the Guaranteed Income Supplement (GIS), they need to file in order to keep receiving it.
- Support from afar: Even if you are providing support to your parent or parents, they have to live with you in order to claim the caregiver credit. Sending money to support them does not qualify.
- Caregiver amount: The caregiver amount was meant to encourage Canadians to help care for their parents or relatives at home. The federal caregiver amount is $4,402 for each dependant, which results in $660 in tax savings. There are also provincial caregiver amounts that will add to your savings.
- Nursing home expenses: If you pay for your parents’ nursing home fees, you may be able to claim them as a medical expense. However, because you cannot claim both nursing home fees and the disability tax credit, it may be more beneficial to restrict your claim to the attendant care portion of the fees to the extent that they do not exceed $10,000.
- Disability Tax Credit: If a parent qualifies for the Disability Tax Credit but does not have enough taxable income to take full advantage, he or she may be able to transfer the unused amount to you. The parent must depend on you for all or some of the basic necessities of life for the transfer to be allowed.
Life can get hectic, especially for Canadians who are caring for children and aging parents, so use tax preparation software, like H&R Block At Home, that provides a safe, reliable and stress-free option and ensure you get your maximum refund.
Information provided by H&R Block.
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