Before 2017, Canadians were able to claim one or more of three potential non-refundable tax credits for care: the infirm dependent credit, the caregiver tax credit, and the family caregiver tax credit. These credits were intended to reimburse family caregivers for a portion of the mandatory out-of-pocket expenses that are occasionally incurred; however, the rules governing their use were difficult to understand and were ambiguous.
Since 2017, the federal government has simplified and unified these three non-refundable credits into a single credit: the new Canada Caregiver Credit (CCC). This credit aims to help those who support loved ones most and grants caregivers tax breaks for dependents who are financially reliant on them due to illness or incapacity.
Tax credits can be claimed for the following dependents (either direct or relatives of a spouse or common-law partners), who reside in Canada during the year, and who need support for a mental or physical impairment:
Eligibility criteria for claiming the Canada caregiver credit (CCC)
At present the CCC amount for infirm dependents who are parents or grandparents, brothers or sisters, aunts or uncles, nieces or nephews, adult children, or adult children’s aunts or uncles is $7,348 for dependents 18 years or older, and $2,295 for dependents under 18 years of age.
The CCC decreases by every dollar the dependent’s net income exceeds a threshold, which was set at $17,085 in 2021. The dependent is not required to live with the caregiver in order to claim the new credit.
CRA can require a signed physician note confirming impairment during the tax year. However, this is not required if the dependent already has an approved Disability Tax Credit Certificate (form T2201) for the tax year.
Family members can also get unclaimed Caregiver credit from prior years.
How is the Canada caregiver credit calculated when multiple family members are supporting a dependent?
Each incapacitated dependent can only claim one CCC amount, however, the credit can be distributed among many caregivers who provide help to the same person as long as the total amount of their claims does not exceed the maximum annual amount that can be claimed for that dependent.
Can family members claim the Canada caregiver credit if their parents live with them?
Canada caregiver credit can only be claimed by children if the parents living with them have a physical or mental infirmity.
Want to learn more?
You can learn more about federal tax incentives for supporting a loved one by reaching out to us at firstname.lastname@example.org, or by calling us at 1-855-410-7971.