There are a number of tax credits that Canadians can take advantage of that can save them lots of money come tax time. Some of the most common tax credits include the basic, child, spousal, and medical expense tax credit.

When it comes to dependents, most people think of children. But other relatives can qualify as dependents. Every year, tens of thousands of Canadians support their parents and loved ones, paying for prescriptions, meals, professional assistance, medical devices, transportation, and parking fees.

Those out-of-pocked expenses can really add up. According to the latest statistics, the average Canadian caregiver paid $275 per month, or $3,300 per year. We love our family and would do anything for them, but most don’t have an extra $275 to spend every month.

To make ends meet, many Canadians have to dip into their savings, reduce their personal spending, save less for retirement, or go into debt by either taking out loans or using high interest credit cards.

If you’re a caregiver for a family member with an illness or disability, there are certain expenses and credits you can claim when you file your annual taxes that can offset your expenses.

Who Qualifies for the Dependent Tax Credit?

You may qualify for the dependent tax credit if the person you live with relies on you for financial and physical support. That said, there is no one-size fits-all approach to who a dependant is.

According to the Canada Revenue Agency, a dependent is:

  • Your children or grandchildren (biological, adopted, or stepchildren)
  • Your parents and grandparents
  • Brothers or sisters (includes brother-in-law and sister-in-law)
  • Nieces, nephews, aunts, or uncles

To claim the dependant tax credit for one of these people, you need to meet all of the following conditions:

  • Neither you nor your spouse or common-law partner was supported or being supported by that person.
  • You supported a dependant in the current tax year.
  • You lived with the dependant in a home you maintained. That means you cannot claim the Canadian caregiver credit for someone who visited you.

The Most Popular Dependent Tax Credits

Child Care Credit

The most common dependant tax credit for parents is for childcare. Generally, you can only claim expenses for a child under the age of 16, but there’s no age limit if the child has a physical or mental impairment.

Canada Caregiver Credit

In 2017, the Canada Caregiver Credit was introduced, replacing three other credits: the Caregiver Amount, the Family Caregiver Amount, and the Amount for Infirm Dependants. The amount you can claim depends on the relationship you have with the person for which you are claiming the Canada Caregiver Credit, your circumstances, the person’s net income, and whether you used other credits for that person.

Medical Expense Tax Credit for Dependents

In addition to claiming personal medical expenses, you may be able to claim the medical expenses for a dependant. The parameters needed to qualify for medical expense tax credits is actually quite broad and have different eligibility requirements.

The dependant doesn’t need to be mentally or physically impaired to qualify. For example, if your child lives at home and is attending college or university, you can probably claim her braces as a medical expense.

When Can’t You Claim the Dependent Tax Credit?

There are a number of instances where you cannot claim dependant tax credits, even if you meet all of criteria.

  • If you take care of a dependant but the house you live in is maintained by your parents or someone else, you cannot claim the Canada Caregiver Credit.
  • If your grandfather is dependant but your grandmother claims the spouse credit, you cannot claim her as a dependant.
  • You can only make the claim for one dependant, regardless of the number of dependants in the house.
  • If someone is claiming an amount on their taxes for a dependant you cannot make a claim for the same person.
  • If you are required to make child support payments and the other parent is not required to, you cannot claim the amount for the eligible dependant (child). Only the parent who does not pay child support can claim the amount. If both pay, you have to decide who will be making the claim. If you cannot, the CRA will reject the claim for both parents.

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If you had out-of-pocket expenses for a dependant family member, you may be able to claim the cost of that dependant on your tax return. If you’re looking for tax software to help navigate the often-confusing dependant tax credits, can help.

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