Tax Issues

If your parent has become ill there can be several tax issues that come into play depending on the nature of their illness, their age, and the role that family members are playing.

For example, if your parent is unable to complete and file their own tax return it will have to completed by someone else. If they are legally capable they can fill out tax form T1013 – Appointing or Canceling a Representative, which would allow that person to fill out the form. Where your parent is not in the position to legally appoint a representative their legal representative can file on their behalf and a legal Power of Attorney document will have to be provided.

There are various tax benefits available where an individual is considered disabled. For your parent or you to take advantage of these a Disability Certificate will have to be filed with the tax authorities (The Canada Revenue Agency or CRA). The Income Tax Act has guidelines as to what qualifies as a disability and you should approach a qualified medical practitioner to acquire the Certificate.

Various tax deductions and credits may be claimed by your parent or by you in some cases. The rules relating to these benefits can be rather complex and they are interrelated. Your advisor can provide you with some additional information but you should consult a qualified tax professional when planning to make claims. Here is a brief overview:

The Attendant Care Deduction

If your parent qualifies as disabled and requires the services of an attendant to enable them to work, they may be able to claim some or all of the costs of the attendant. The attendant must be at least 18 and not a spouse. The deduction cannot be claimed where the expenses were claimed for the Medical Expense Tax Credit (explained below)

Disability Tax Credit

This credit is available for disabled persons and is 15% of $8,113 or $1,217 for 2017. The credit can be transferred in certain cases. Provincial credits are also available.

Medical Expense Tax Credit

A credit for medical expenses not covered by other sources is available. The amount of the credit is for expenses in excess of the lesser of $2,268 or 3% of the person's net income in 2017. The credit can be transferred in certain cases. Provincial credits are also available.

Infirm Dependent Credit

Where your parent is dependent on you due to physical or mental infirmity you may be able to claim this credit.The amount of the credit depends on your parent's net income and is a maximum of $1,032 in 2017 (15% X $6,883). Provincial credits are also available.

Caregiver Tax Credit

The amount of the credit will be related to the dependent's net income and is a maximum of $700 in 2017 (15% X $4,732).