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Family Caregiver Amount Tax Credit

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Filing Your Return -> Family Caregiver Amount Tax Credit

Family Caregiver Amount (FCA) Tax Credit

Income Tax Act s. 118(1)

The 2011 Budget introduced a Family Caregiver Amount Tax Credit (FCA), beginning in 2012.  The legislation was included in Bill C-13, which received Royal Assent (became law) on December 15, 2011.  Yukon is also providing the Family Caregiver Tax Credit.

This is a non-refundable tax credit based on an amount of $2,000, at the lowest tax rate of 15% federally, 7.04% for Yukon.  This tax credit is increased annually for inflation.  Only one family caregiver amount will be available in respect of each infirm dependant.  A letter from a qualified medical professional is required in order to claim this tax credit.

This tax credit provides an increase of $2,040 for 2013 ($2,058 for 2014) to

bullet the spousal amount (line 303 of Schedule 1), if the spouse or common-law partner is dependent on the individual by reason of mental or physical infirmity
bullet the equivalent to spouse/eligible dependant amount (line 305 of Schedule 1), if 
bullet the dependant who is age 18+ at the end of the year is, at any time in the year, dependent on the individual by reason of mental or physical infirmity
bullet the dependant who is under 18, is not a child for whom the taxpayer is claiming the child amount, and who, by reason of mental or physical infirmity, is likely to be, for a long and continuous period of indefinite duration, dependent on others for significantly more assistance in attending to the dependent person's personal needs and care, when compared to persons of the same age, and was so dependent on the individual at any time in the year
bullet the child amount (line 367 of Schedule 1), for each child who, by reason of mental or physical infirmity, is likely to be, for a long and continuous period of indefinite duration, dependent on others for significantly more assistance in attending to the child's personal needs and care, when compared to children of the same age.  The Child Amount Tax Credit is proposed to be eliminated for the 2015 and later taxation years as per the October 2014 Federal Tax Update.  However, it is also proposed to amend legislation so that the Family Caregiver amount will still be available for infirm minor children.
bullet the caregiver amount (line 315 of Schedule 1), if the person is dependent on the individual by reason of mental or physical infirmity
bullet the infirm dependant (18+ years of age) amount (line 306 of Schedule 1)
bullet The infirm dependant amount now automatically includes the family caregiver amount.  The 2013 amount is $13,078 less the greater of $6,548 or the dependent's income, resulting in a tax credit amount of $6,530 when the dependent's income is less than $6,548.  See the tables of non-refundable tax credits.

The income threshold for these tax credits is also increased by the FCA when the FCA can be claimed, except for the infirm dependant amount, which already includes the FCA.

Schedule 5 of the personal tax return is completed in order to claim the family caregiver amount.

The $2,000 is indexed for inflation, so will be $2,040 in 2013 and $2,058 in 2014.  The amount is noted at the bottom of the tables of non-refundable tax credits - base amounts.

Although the Canada Revenue Agency (CRA) documentation on this tax credit uses the word "impairment", the word used in the Income Tax Act is "infirmity", which is not defined in the income tax act.  The word "impairment" is used in the Income Tax Act in relation to the disability tax credit, which requires completion of form T2201.  For the Family Caregiver Amount, form T2201 is not required, but a letter from a qualified medical professional is required.  The letter must indicate that the dependent person, "by reason of mental or physical infirmity, is likely to be, for a long and continuous period of indefinite duration, dependent on others for significantly more assistance in attending to the dependent personís personal needs and care, when compared to persons of the same age, and is so dependent on the individual at any time in the year".

Canada Revenue Agency (CRA) Resources:

Family Caregiver Amount (FCA) - includes link to video

 

Revised: November 01, 2014

 

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