Is your loved one living in a seniors’ or assisted living residence or requires home care services?
Some of those expenses can be deducted on their or your tax return subject to several conditions. There are many terms to describe the different kinds of living arrangements and care that a person receives, so we need to define these terms.
You can claim amounts for attendant care for any of the following places—self-contained domestic establishments (meaning your home), retirement homes, homes for seniors or other institutions, schools or group homes and nursing homes (where the care is full-time).
In order to deduct the attendant expenses, the attendant must not be your spouse or common law partner and must be older than 18.
The attendant care expenses can be claimed by you or your spouse, but can only be claimed once.
In order to make a claim, Form T2201 Disability Tax Credit must have been filled out and approved by the Canada Revenue Agency, or a medical practitioner must certify in writing that the person is and will continue to be dependent on other for his or her personal needs.
You can claim the entire amount paid for full-time care in a nursing home and only the care or training and care at a school or institution.
In all other cases (living arrangements), the fees claimed must be for salaries and wages paid for attendant care services. In a nursing home, all fees including food, accommodation, nursing care, administration, maintenance, social programming and activities qualify as medical expenses.
Personal grooming expenses such as hairdresser are not allowed.
If you also qualify for the disability amount you have the option to claim the nursing home fees paid for full-time care or the disability amount, but not both.
Or if you qualify for the disability amount, you can claim the part of nursing home fees paid for full time care that relate only to salary and wages up to a maximum of $10,000.
Again, there is the ability to increase a refund or decrease taxes payable by manipulating the medical/disability amount.
If you are not in a nursing home but require attendant care, you can claim your share of salaries and wages paid to all employees who prepare food, perform housekeeping services, laundry services, nursing/health care services, programs social activities, transportation services, security services and personal services such has hairdressing, manicures and pedicures if included in the monthly fee.
If you are receiving attendant care at home, you can only claim expenses for the period of time that you were at home and needing help.
Expenses you can’t claim are rent, food, cleaning supplies, other maintenance expenses and a portion of salaries paid to administration and maintenance staff.
The monthly statement from the retirement home must clearly indicate the breakdown of expenses in order to claim them. The statement must show how much is rent, administration wages, nursing wages, activities wages, housekeeping and laundry wages, dietician and chef wages and transportation wages.
If the establishment is considered a ‘full-time care’ or ‘nursing home,’ the statement does not need to show all the detail.
Most retirement homes are aware of the CRA requirements for the attendant care deduction.
Your accountant must receive the monthly or annual statement(s) in order to calculate the highest deductible amount.
If you receive care in a group home, you can claim both the disability amount and the care expenses.
Another tricky area is whether or not you need to pay GST on these services because some are considered health care which is GST exempt and other services are not.
You don’t have to pay GST on services provided to you by a licensed or certified practitioner, such as physiotherapy.
You don’t have to pay GST for home care services provided in your home if you have received some sort of subsidy or funding.
You don’t have to pay GST for services of providing care and supervision to someone with an impairment in physical or mental function or if the person is in a group home. You don’t have to pay GST on the receipt of home delivered meals when they are provided by a non-profit, charity or government organization.