Attendant care expenses can only be claimed for amounts paid to an
attendant who was not the taxpayer's spouse or common-law
partner, and who was
at least 18 years old when the payments were made. Attendant care costs
can be claimed for persons who are eligible for the disability amount (see the
article on disability amount tax credit), and in some situations for persons who do
not qualify for the disability amount.
You can claim attendant care costs for amounts paid, by you
or your spouse or common-law partner, for the
care of
yourself
your spouse or common-law partner
your or your spouse or common-law partner's dependent
child under age 18
other eligible dependents of you or your spouse
or common-law partner:
a dependent child aged 18 or over
a dependent grandchild
a dependent parent, grandparent, brother, sister,
aunt, uncle, niece or nephew, if they lived in Canada at any time
during the year.
Attendant care costs for other eligible dependents are
claimed as medical expenses, and are subject to the federal and
provincial/territorial limits for medical
expenses for other eligible dependents.
If attendant
care expenses are paid to an individual, your receipt must include their
social insurance number. The individual will either be a self-employed
contractor, or your employee. If the individual is an employee, you will
be required to deduct from their pay and remit income tax, CPP
contributions, and EI premiums. You will also have to pay the
employer portion of CPP contributions and EI premiums, which would be part of
your total attendant care costs. The amounts that
you pay to an employee are subject to the rules for minimum
wages rates and other employment standards for your province or
territory. To determine whether the person is an employee or a
contractor, see our article on employee
vs self-employed contractor.
Attendant care expenses for
persons who do not qualify for the disability
amount
When a person does not qualify for the disability amount,
in order for attendant care costs to be claimed, a medical practitioner must certify
in writing that the person needs a full-time attendant due to mental
or physical infirmity and will likely continue to be dependent on
others for the long term. Attendant care can be claimed as part of
the medical
expense tax credit for:
full time attendant care in a self-contained domestic
establishment (the person's home, for instance)
full or part time care in a school, institution, or other establishment
- to claim these expenses, a medical practitioner must confirm the
person's need for the equipment, facilities, or personnel available in the
establishment.
Attendant care expenses for
persons who qualify for the disability amount
For persons who qualify for the disability amount,
attendant care expenses may be claimed for:
part time or full time attendant care in a self-contained domestic
establishment (the person's home, for instance)
attendant care in retirement homes, homes for seniors, or other
institutions
full or part time care in a school, institution, or other establishment
- to claim these expenses, a medical practitioner must confirm the
person's need for the equipment, facilities, or personnel available in the
establishment.
care or supervision provided in a group
home in Canada
The attendant care expenses can be claimed either:
The attendant care costs can also be split between the
disability supports deduction and medical expenses.
Claiming attendant care
costs as disability supports deduction
Individuals who have incurred attendant care expenses in
order to be employed or self-employed, go to school or conduct research, can
claim these costs on line 215 of the personal tax
return as part of the disability
supports deduction, as a reduction
of income. This is better than claiming these costs as a medical
expense, because medical expenses are reduced by the lesser of $1,925 (for
2007) or 3% of net income
in order to calculate the tax credit. The
medical expense tax credit is always at the lowest tax rate (except in
Québec), but a reduction
of income would save tax at the person's marginal tax
rate.
Claiming attendant
care costs as medical expense tax credit
For other individuals who are eligible for the disability
amount, attendant care expenses are claimable as a medical expense. The
expenses can be claimed by the individual, or by one or more supporting
relatives who have paid the expenses. This
claim is also available for seniors who are in a retirement home
and are eligible for the disability amount. For more information on what
type of attendant care costs are claimable, see our article on attendant
care expenses paid to a retirement home.
There are 2 options available when claiming attendant care expenses as a
medical expense for a person who qualifies for the disability amount:
Option 1: Claim the disability tax credit, and claim attendant care
expenses as medical expenses, to a maximum of
$10,000 per year, and $20,000 in the year of death. Any unused
portion of the disability amount can be transferred to a spouse or
common-law partner or to another supporting person.
Option 2: Do not claim the disability tax credit. In
this case there is no maximum for the amount of attendant care
expenses that can be claimed as medical expenses. For 2007, the
federal disability amount is $6,890. Thus, if your total attendant care expenses exceed $16,890 ($10,000
maximum attendant care expenses + $6,890 disability amount), it is better to claim
the attendant care expenses as medical expenses and not claim the disability amount. In this case,
the disability amount cannot be claimed by the taxpayer, nor can it be
transferred to anyone else.
The two options above refer to expenses claimed under s.
118.2(2)(b.1) of the Income Tax Act (ITA), for attendant care provided in
a self-contained domestic establishment, or
retirement homes, homes for seniors, or other
institutions
Note that the $10,000 maximum above is per paying
individual,
not per patient. Each supporting person who is entitled to claim a
medical expense tax credit for attendant care for a patient under s.
118.2(2)(b.1) may claim up to $10,000. See the Canada Revenue Agency (CRA) technical
interpretation 2006-0172181I7
for further details. This makes it advantageous to share high
attendant care costs among supporting persons. For example, the
supporting persons could be husband and wife supporting a parent or
grandparent or adult dependent child, or could be siblings supporting a parent
or grandparent. The key is that each supporting person making a claim
must have a receipt to support their claim. Keep in mind that when the
attendant care costs are claimed for other eligible dependents they
are subject to the limits for medical
expenses for other eligible dependents.
Nursing home expenses
Income Tax Act s. 118.2(2)(d)
When the expenses are for full-time care in a nursing
home, there is no limit on the total expenses that can
be claimed as medical expenses for yourself or your spouse or common-law
partner, but the disability
tax credit cannot be claimed. When these costs are claimed for other
eligible dependents, they are subject to the limits for medical
expenses for other eligible dependents. When claiming expenses for full-time
care in a nursing home, either
a letter from a medical practitioner must be provided
which certifies that the person needs a full-time attendant due to mental
or physical infirmity, will be likely continue to be dependent on
others for the long term.
Group home expenses
Income Tax Act s. 118.2(2)(b.2)
Attendant care expenses can be
claimed for care or supervision provided in a group home in Canada maintained and operated exclusively for individuals
who have a severe and prolonged mental or physical impairment. Form
T2201 must be submitted and approved to claim these expenses, and the expenses
must not have been claimed as part of a disability
supports deduction. The disability tax credit is also available when
the group home expenses are claimed. There is no limit on the amount of
group home expenses that can be claimed as medical expenses for yourself or
your spouse or common-law partner or dependent child under age 18. When
these costs are claimed for other eligible dependents, they are subject to the
limits for medical
expenses for other eligible dependents.
The information on this site is not intended to be a
substitute for professional advice. Each person's situation differs, and
a professional advisor can assist you in using the information on this web
site to your best advantage.
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