New Essential Tax Facts: Canada Caregiver CreditPosted: January 09, 2018 By: Evelyn Jacks
Posted in: Strategic Thinking
Did you know that starting in the 2017 tax year, the federal government has introduced a new Canada Caregiver Credit (CCC)? It replaces the Family Caregiver Tax Credit, the Caregiver Tax Credit, and the Credit for Infirm Dependants. But, it’s complicated! Here, in our first tax tip of the new 2018 tax filing season, we offer you a few details:
This credit comes in two parts; to make things easier to understand we refer to them as a “mini” and a “maxi” credit:
- A “Mini” CCC of $2,150, which must be claimed for an infirm minor child or someone for whom you are claiming a spousal amount. Remember that the term spousal amount also includes an “eligible dependant” or a someone you are claiming as “equivalent to spouse.”
- A “Maxi” CCC of $6,883, or a portion thereof, may be claimed if you are supporting a spouse or eligible dependant whose net income is over $11,635. 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.
We will show you how to help caregivers make the claim for three different profiles of dependants, this week starting with infirm spouses:
Infirm spouses, common-law partners, and eligible dependants. This Canada Caregiver Credit is complicated for spouses because you may be able to claim the Mini CCC of $2,150 in conjunction with the spousal amount. However, if you can’t claim the spousal amount then you may be able to claim part of the Maxi amount of $6,883. Three questions are important:
- Can you claim a spousal amount over $4,733? That’s for your spouse who has net income under $6,902. If so, then you can add the Mini amount of $2,150.
- Do you have a spousal amount under $4,733? There may be an additional claim for a partial Maxi CCC if you have a small spousal amount. That is, if the spousal amount is $4,733 or less, you get a top-up of your total combined CCC claim (Mini and Maxi) to $6,883, as follows: claim the spousal amount; claim the Mini CCC; and claim $6,883 minus the spousal amount minus $2,150.
- Is your dependant’s income too high to claim the spousal amount? If your spouse’s income is between $11,635 and $16,163, claim the full Maxi CCC of $6,883. If your spouse’s income is between $16,163 and $23,046 claim the Maxi CCC minus your dependant’s net income over $16,163.
The good news – if you are using tax software – it will do all of this for you! Remember, only one claim may be made for the Canada Caregiver Credit for your spouse or eligible dependant. No claim may be made for a dependant to whom the taxpayer is required to make spousal support payments, except in the year of marital change, when the taxpayer may claim either the dependant or the support payments made.
Note that the figures used to compute the CCC are indexed annually. For 2018, the $2,150 figure is indexed to $2,182; the $6,883 figure is indexed to $6,986, and so on. Join us next time when we will discuss claiming the Canada Caregiver Amount for minor and adult children.
Additional Educational Resources: Join us for Canada’s best Advanced Tax Update at the CE Summits, with Evelyn Jacks and special guest experts, being held in six cities starting next week. Early registration savings end midnight January 10 but we still accept registrations. Please note that Regular Fees apply after deadlines.
Evelyn Jacks is President of Knowledge Bureau and author of the New Essential Tax Facts: How to Make the Right Tax Moves and Be Audit-Proof, Too
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