Tax season: answers to 9 questions caregivers often ask

You can feel that they are yearning for some clarification: how can everything I do for the person I am caring for be recognized? That’s what’s on their minds.

Caregivers have very different situations, so my first advice is to discuss it with an accountant. This advice applies to all of my responses during our discussion!

Let’s first take a look at the provincial tax system. There are two points to remember:

• If you are a caregiver: The refundable tax credit for caregivers has two components. Tier 1, for a caregiver who provides assistance to a person 18 years of age or older with a severe and prolonged impairment. Tier 2 is for a caregiver who is living with the person they are caring for (other than a spouse) who is 70 years of age or older without a disability;
• For the parent who is a caregiver for a child with a disability, there is the Supplement for Handicapped Children as well as the Supplement for Handicapped Children Requiring Exceptional Care.

At the federal level, if you are a caregiver or a parent caring for a child with a disability, you may be able to receive the non-refundable Canada caregiver credit if you are helping:

• your spouse or common-law partner;
• an (eligible) dependant who is 18 years of age or older and who is not your spouse/common-law partner;
• an eligible dependant who is under the age of 18 at the end of the year;
• your (or your spouse’s/common-law partner’s) children who are under 18 years of age at the end of the year.

Be aware that the person you are caring for may have to complete the Certificate Respecting an Impairment (in Quebec) and the Disability Tax Credit Certificate (in Canada). I recommend contacting an accountant and also Revenu Quebec and the Canada Revenue Agency for more information.

A person is considered dependent if they rely on you to financially provide for all or part of their basic needs on a regular and consistent basis. Basic needs primarily include food, shelter and clothing.

Relevant question! In the context of a caregiver tax credit application, there is no documentation that attests that a person is a caregiver. In addition, there is no official document detailing everything a caregiver does for a person being cared for.

If you provide for the basic needs of your loved one, it is because they depend on you for food, shelter and clothing. Fiscally speaking, proving that one person is dependent on the other is not that straightforward. The aspect of disability and impairment may come into play at this point.

A person can be “assisted” in different ways: accompany them to do their errands, drive them to medical appointments, help them bathe, provide psychological support at various times; there are so many ways to help a person and be a caregiver!

In fact, “assisted” person implies a strong helping relationship. If I accompany someone once a week to do their grocery shopping, that’s a real helping relationship, but it doesn’t necessarily mean that they are dependent on me and that I can claim the federal tax credit, because you have to meet the eligibility criteria that I mentioned at the beginning of our discussion.

The stipulation of time commitment is a delicate issue. Help can be given on an ad hoc basis several times a week, without continuity.

At the provincial level, there is a minimum of 183 days in the tax year during which the caregiver must be involved with the person. Here again, we must refer to the eligibility criteria for the tax credit and to components 1 and 2 already mentioned. These criteria must be met, even before considering the number of days.

At the provincial level, if the person you are caring for lives in a private seniors’ residence (PSR), this is an exclusion criterion for caregivers who wish to claim the caregiver tax credit; they will not be eligible.

The same applies if the person being cared for lives in a public facility, such as a CHSLD, an intermediate resource or an alternative living facility. If the person being cared for lives in a low-cost housing facility, these are managed by the housing authorities. The caregiver could then be eligible. It is recommended to discuss this with an accountant.

At the federal level, the place of residence is not a criterion in itself for receiving the Canadian caregiver credit. If the person you are caring for is considered to be dependent on you, you may be eligible for the tax credit.

It is true that the words “impairment” and “disability” can be confronting.

The sections of the two documents that the person’s physician must complete deal with impairments that limit the person’s ability to perform daily activities: at the physical (seeing, speaking, hearing, walking, eating, dressing) and mental (e.g., learning, concentration, judgment, memory) levels.

You cannot force the person you are caring for to ask their doctor to complete these documents, but you can reassure them:

• A physician, medical specialist or specialized nurse practitioner will be able to tell you if they are able to complete the documents based on the disabilities and limitations of the person you are caring for;
• These documents are used by Revenu Québec and the Canada Revenue Agency to analyze applications. They are used to determine the aspects in which the person being cared for requires the help and assistance of a caregiver, for example, to carry out daily activities;
• These two documents will not be used to declare the person unfit. The process to declare a person incapacitated is much more complex and time consuming;
• With these documents, the person you are caring for may be able to benefit from tax credits that may help them. Your accountant can verify if these documents could allow them to access other tax credits;
• This process could also be a way to be recognized as a caregiver by Revenu Québec and the CRA.

Tax credits for medical expenses are available at both the provincial and federal levels. Please note that some expenses may be eligible for a refundable tax credit while others are not.

For home care, people aged 70 and over can benefit from various tax credits, for example:

• The Tax Credit for Home-Support Services. This is a tax credit with eligible expenses for services such as housekeeping, bathing assistance, nursing care;
• The Independent Living Tax Credit. Eligible goods include a person-centred remote monitoring device (panic button) or technical aids to help get into the bathtub or get around (walker).

A caregiver’s role may involve travel and transportation costs:

• The only existing tax credit related to transportation is the non-refundable tax credit for medical care expenses not provided in your area. This means that a person being cared for in their area who needs care that is not available in that area must travel to another area to receive it. These transportation, meal and accommodation expenses can be claimed. Keep all invoices!
• Daily or one-time travel outings, such as shopping or going to medical appointments, are not expenses that are deductible;
• Paying for expenses alone while you use your own vehicle to assist the person you are caring for can add up to a lot of money in the long run. Why not discuss the possibility of sharing the cost of gas with the person you are caring for? After all, in the model of accompaniment-transportation service for medical appointments offered by the Volunteer Centres (Centres d’action bénévole) vehicle use and parking fees are assumed by the person who uses the service provided by the volunteer…

As a Caregiver Support counselor, I want to say that the Caregiver Support Helpline answers your questions in general, but does not provide support for your tax matters. For that, you should talk to an accountant and for more specific questions, contact Revenu Québec and the Canada Revenue Agency.

During tax season, I sometimes advise people to contact a Volunteer centre (Centre d'action bénévole), as there are free or low cost tax information clinics. The list is on the Canada Revenue Agency website.

1. Other credits and amounts are available, such as the amount for an eligible dependant or the medical expense tax credit. An accountant can advise you and confirm what may apply to your situation;
2. Refundable or non-refundable? In the first case, whether the person pays taxes or not, the refund will happen if they are eligible. Non-refundable is only valid if the person pays taxes, as it reduces or cancels what they owe;
3. I encourage caregivers to keep proof of payment for all expenses related to their role. This allows an accountant to verify whether expenses incurred during the year are eligible for tax credits;
4. For assistance in managing your budget, the Associations coopérative d’économie familiale (ACEF) can be a useful resource;
5. Revenu Québec regularly updates its guide entitled Seniors and Taxation. I recommend it!

• Tax benefits for caregivers;
• Overview of the Canadian Caregiver Credit;
• Caregiver Tax Credit at a Glance;
• Need assistance completing your return?
• Managing the finances of the person I am caring for;
• Knowing the rights and status of the caregiver;
• Being a parent caregiver;
• Contact the Caregiver Support Helpline.