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 The
Money Management Newsletter: Retirement
Income Planning
Eldercare: Under a microscope
Part 5 of 6: Caregiver
Amount Tax Credit
By Anne Chun,
C.A., CFP
Money Management Newsletter - February 2004
In
part 1 of this series, which discussed the various tax treatments of medical
related expenses, Caregiver amount was identified as a tax credit and
not a tax deduction. In this article, we will focus on the details of
the Caregiver amount Tax Credit.
There are a number of conditions you have to satisfy
before the tax credit can be claimed. These include:
- You provided home care for you or your spouse's parent
or grandparent who was 65 or older and the parent or grandparent lives
with you.
- You provided home care for a mentally or physically
infirm dependant age 18 or over and the dependant lives with you. If
the dependant is your child or grandchild, he/she does not have to be
a resident of Canada for tax purposes.
- If you and another person supported the same dependant,
you can split the claim for the dependant but the total claim cannot
exceed the maximum tax credit (discussed below).
- You may be eligible to claim both the Caregiver amount
Tax Credit and the tax credit for an eligible dependant for the same
dependant but the former must be reduced by the latter tax credit.
- You cannot claim the Caregiver amount Tax Credit
and tax credit for infirm dependants for the same dependant.
- If someone other than yourself claims the tax credit
for an eligible dependant for the dependant, you cannot claim the caregiver
amount for that dependant.
If the above conditions are satisfied, you can claim
a Caregiver amount Tax Credit of $3663 (2003 and indexed) less, in the
case of a dependant, the dependant's net income in excess of $12,509 (2003
and indexed).
From a tax planning perspective, depending on the income
of the dependant, it may be more beneficial to claim the tax credit for
infirm dependants rather than the Caregiver amount Tax Credit.
* CA PrimePlus Services is a registered trademark
of the Canadian Institute of Chartered Accountants. Eldercare/CA PrimePlus
Services is a customizable range of financial management services for
elderly and disabled persons.
Anne Chun, C.A. CFP is the principal of Anne Chun Professional Corporation,
providing financial, tax, estate and Eldercare services. She is also the
co-author of "Planning your Financial Future". Find out more
from her web site (www.annechun.ca).
*
* *
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, Fiscal Agents Money Management Newsletter
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