The Canada Caregiver Credit (CCC), new in 2017, is still poorly understood and a complicated tax break to explain. For these reasons, many Canadians have missed claiming it. But it’s important to get up to speed on this. The credit can help families under medical stress and can make a big financial difference when added to their year-end review or to adjust 2017 tax returns for missed claims. Here’s how it works.
The CCC replaced the Family Caregiver Tax Credit, the Caregiver Tax Credit, and the Credit for Infirm Dependants. This credit comes in two parts:
1) A “Mini” CCC of $2,150 in 2017 ($2,182 in 2018), which must be claimed for an infirm minor child or someone for whom you are claiming a spousal amount. The term “spousal amount” also includes an “eligible dependant” or someone you are claiming as “equivalent to spouse.”
2) A “Maxi” CCC of $6,883 in 2017 ($6,986 in 2018), or a portion thereof, may be claimed if you are supporting a spouse or eligible dependant over 18 whose net income is over $11,635 in 2017 ($11,809 in 2018). You may also claim this amount for infirm adults who are considered “other dependants.” But this larger credit is never claimed for a minor child.
The Maxi portion of the Canada Caregiver Credit is complicated for spouses, because you may be able to claim the Mini CCC in conjunction with the spousal amount. However, if you can’t claim the spousal amount, then you may be able to claim part (or all) of the Maxi amount.
A “dependant” can also be your own parents/grandparents, brothers/sisters, aunts/uncles, nieces/nephews or adult children, or those of your spouse or common law partner. Only one claim will be allowed for the Canada Caregiver Credit for this class of dependant, although the claim could be shared among two or more taxpayers as long as the total amount claimed does not exceed the allowable claim.
The Canada Revenue Agency may contact you at some time in the future to verify the claim for the Canada Caregiver Credit or the Disability Amount. An “infirm dependant” is one who has “an impairment in physical or mental functions.” A child under 18 will be considered to be “infirm” only if he or she is likely to be, for an indefinite duration, dependant on others for significantly more assistance in attending to personal needs, compared with children of the same age. This person can be claimed for the Canada Caregiver Credit.
Finally, don’t forget that the EI Compassionate Care Benefits for Caregivers are available for up to six months.