Answer
The home accessibility tax credit is a non-refundable tax credit designed to help seniors and individuals with disabilities make their homes more accessible. This credit can be claimed for eligible renovations and upgrades that improve safety, accessibility, or functionality within the home. KWB can assist you in understanding the specific requirements and maximizing your claim for the home accessibility tax credit.
Overview
This article explores the home accessibility tax credit, a federal initiative designed to support Canadians in making their homes more accessible. It details the types of renovations that qualify and how to claim this credit.
We also present a labeled real-world hypothetical involving Alex, who uses the home accessibility tax credit to improve their Edmonton home.
- Credit Details: discover what the home accessibility tax credit covers.
- Common Questions: find answers to frequently asked questions about eligibility and claims.
What is the Home Accessibility Tax Credit (HATC)?
The 2015 federal budget announced the introduction of a new Home Accessibility Tax Credit (HATC), beginning in 2016.
The HATC is a non-refundable tax credit for qualifying expenses incurred for work performed or goods acquired in respect of a qualifying renovation of an eligible dwelling of a qualifying individual. A qualifying individual and eligible individuals can claim the HATC annually.
Qualifying individual – is an individual:
- who is 65 years or older before the end of the taxation year; or
- who is eligible to claim the disability tax credit at any time in the taxation year.
- Includes a spouse, common-law partner, and certain supporting relatives of a qualifying individual
- Certain Supporting Relative is an individual that has claimed the amount for an eligible dependant, caregiver amount or amount for an infirm dependent age 18 or older for the qualifying person
An eligible dwelling is:
- A housing unit located in Canada
- Must be the principal residence of the qualifying individual at any time in the tax year
The HATC applies to the total qualifying expenses, up to a maximum of $10,000 per year. The credit is at the lowest personal tax rate of 15%, so the maximum tax credit per year is $1,500 ($10,000 x 15%).
The HATC can be claimed for all eligible expenses during the tax year up to a maximum of $10,000, even if a portion or all of those expenses were also eligible expenses for the purpose of claiming the medical expense tax credit during that same tax year.
A qualifying renovation for the 2016 and subsequent tax years is a renovation or alteration that is of an enduring nature and is integral to the eligible dwelling. Generally, if the item purchased or work performed will not become a permanent part of your dwelling, it is not eligible. The renovation must:
- Allow the qualifying individual to gain access to, or to be mobile or functional within, the eligible dwelling; or
- Reduce the risk of harm to the qualifying individual within the eligible dwelling or in gaining access to the dwelling
If you do the work yourself, you can still claim the amount that you spend on materials.
You will not have to submit your original receipts with your tax return but you should keep them in the event that they are requested by the Canada Revenue Agency.
Claiming the credit
A new schedule will be included in the 2016 tax return that allows us to list your eligible expenses and to calculate the amount of your claim.
If you would like more information or have any questions, feel free to contact us at 780.466.6204, or click here to send us an email.
Thanks to Richard Ouellette of KWB Chartered Accountants for providing this content.
FAQ
To help you better understand the Home Accessibility Tax Credit and how it applies to your situation, we’ve compiled answers to some common questions.
| Question | Answer |
|---|---|
| How does the Home Accessibility Tax Credit (HATC) function for Edmonton residents? | For Edmonton residents, the home accessibility tax credit (HATC) helps seniors and persons with disabilities cover costs for eligible home renovations by reducing the amount of income tax owed. This non-refundable credit can lower your tax payable to zero, but it will not result in a refund if the credit amount exceeds your tax liability. It aims to make homes in Edmonton safer and more functional for qualifying individuals. |
| What are the eligibility requirements for individuals claiming the Home Accessibility Tax Credit (HATC) in Edmonton, Alberta? | In Edmonton, Alberta, individuals must be 65 or older by year-end or eligible for the disability tax credit to claim the home accessibility tax credit. The renovations must be for an eligible dwelling, usually their principal residence, and directly improve accessibility for the qualifying individual. |
| Which specific home renovations are eligible for the Home Accessibility Tax Credit (HATC) in Edmonton, Alberta? | In Edmonton, Alberta, eligible home accessibility tax credit renovations include permanent improvements that enhance mobility, reduce harm, or improve functionality for an eligible individual. Examples are installing grab bars, building ramps, creating walk-in showers, or widening doorways within the dwelling. These modifications must be integrated into the home. |
| What is the maximum Home Accessibility Tax Credit (HATC) amount Edmonton residents can claim? | Edmonton residents can claim up to $10,000 in eligible expenses annually for qualifying home accessibility renovations. This non-refundable credit can reduce your federal income tax owing to zero, but it does not provide a refund if the credit amount exceeds your tax payable. |