Deductible medical costs if you qualify for a disability tax credit

tax

A taxpayer can claim deductible medical costs paid for themselves as well as for their spouse, common-law partner and dependents.

A dependent can include;

  • the taxpayer or their spouse/common law partner’s child or grandchild or
  • the taxpayer of their spouse/common law partner’s parent, grandparent, sibling, uncle, aunt, niece or nephew whom lived in Canada at any time during the year.

Please see our blog article regarding deductible medical costs and attendant care for a list of items that would qualify.

If you or a dependent have qualified for the disability tax credit, there is potential for additional tax savings.  The disability tax credit is $8,235 for 2018 and $8,416 for 2019 and can occasionally be combined with other tax savings.  If this credit cannot be used by the person with the disability, it can be transferred to a family member as long as the disabled taxpayer is dependent on that family member for all or some of the basic necessities of life such as food, shelter or clothing.

In order to qualify for the disability tax credit, a form T2201 must be certified by a medical practitioner and accepted by CRA.  If you are unsure whether you qualify, the form also includes a section to self assess.  You can find the form here.

Occasionally a claim can be made for both the attendant care as a medical expense AND the disability tax credit.  In other situations, only one or the other can be claimed and an assessment will need to occur to ensure you are getting the greatest tax savings.  Here is a table from CRA which outlines some of these scenarios;

 

The type of expense you might    claim, the certification needed, and if you can also claim the disability amount

Type of expense

Certification required

Can you claim the disability    amount?

Fees paid for full-time care in a nursing home Form T2201 or a medical practitioner must certify in writing that you   are, and in the foreseeable future will continue to be, dependant on others   for your personal needs and care because of a lack of normal mental capacity. You can claim the disability amount, if eligible, or these expenses, but not both.
Salaries and wages for one full-time attendant outside of a   self-contained domestic establishment Form T2201 You can claim the disability amount or these expenses, but not both.
Salaries and wages for attendant care provided in Canada. This can   include the part of the nursing home fees paid for full-time care that relate   only to salaries and wages. Form T2201 You can claim the disability amount and up to $10,000 for these   expenses ($20,000 if the person died in the year). See below for more   information.
Full-time attendant at home Form T2201 or a medical practitioner must certify in writing that you   are, and will likely be for a long continuous period of indefinite duration,   dependant on others for your personal needs and care because of an impairment   in physical or mental functions and need a full-time attendant. You can claim the disability amount, if eligible, or these expenses,   but not both.
Care in a group home in Canada Form T2201 You can claim the disability amount and these expenses.
Care, or training and care, at a school, institution, or other place   (such as a detoxification clinic) Form T2201 or an appropriately qualified person must certify in   writing that because of a mental or physical impairment, you need the   equipment, facilities or personnel specially provided by that place for   persons with the same type of impairments.Note
An appropriately qualified person includes a medical practitioner and can   also include the principal of the school or head of the institution or other   place.
You can claim the disability amount, if eligible, and these expenses.

http://www.cra-arc.gc.ca/E/pub/tg/rc4064/rc4064-e.html

If you are the person with a disability, you may be able to claim the following;

  • Attendant care services – This cannot include payments made to a spouse or common law partner or anyone under the age of 18
  • Various devices needed for persons that are deemed blind, deaf or have the inability to communicate such as Braille devices, reading services, etc.

 

Attendant care as a medical claim is further complicated by the following rules in place;

1)       You can claim the disability tax credit, as you claim attendant care as a medical expense up to a maximum of $10,000 per year ($20,000 in year of death).  The unused portion of the disability amount can be transferred to a supporting person.  or;

2)       You can claim attending care expenses and ignore the disability tax credit.  There would then be no maximum on claiming attending care.  In this situation, there is no available transfer of credits to a supporting person.

 

If you would like more information or have any questions or want to ensure you are maximizing these benefits, feel free to contact us at 780.466.6204, or click here to send us an email.

Thanks to David Wickenberg of KWB Chartered Professional Accountants for providing this content.

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