Part 2/6 - Attendent Care Expenses
By Anne Chun, C.A., CFP
This is part 2 of a series of articles on Eldercare/CA PrimePlus Services*.
In part 1 of this series, which discussed the various tax treatments of medical related expenses, Attendant Care Expenses were identified as a tax deduction subject to an income test. In this article, we will focus on the details of Attendant Care Expenses Tax Deduction.
There are a number of conditions you have to satisfy before expenses can be deducted. These include:
If the above conditions are satisfied, the Attendant Care Expenses can only be claimed by the taxpayer and are not transferable.
The amount that is deductible is subject to an "income test". The maximum amount that can be claimed is two-thirds of your "earned income". Earned income is the total of employment income, self-employment income, the taxable part of scholarships, bursaries, fellowships and similar awards, net research grants and any earnings supplement received under a project sponsored by a government in Canada to encourage employment.
If you fail the income test (i.e. you have no earned income and therefore
there is no deduction for the Attendant Care Expenses), you can
claim a maximum of $10,000 (or $20,000 in the year of death) as a Medical
Expense Tax Credit. This tax credit can be transferred to your spouse
or relative whom you are dependent upon. Medical Expense Tax Credit
is discussed in greater detail in a separate article.
*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".
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