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Claiming Medical Expenses and Tax Credits when Caring for the Elderly

If you or your spouse are caring for an elderly parent or grandparent there may be tax credits you can claim on your 2020 personal tax returns. 

This is a non-refundable tax credit for eligible medical expenses of a dependent parent or grandparent that lives in Canada at any time in the year. Residents of Quebec may claim a provincial non-refundable tax credit of 20% of eligible medical expenses paid for a dependent parent or grandparent in any 12-month period ending in 2020 and not claimed in 2019, that exceeds 3% of the net family income. A federal non-refundable tax credit may also be claimed for 15% of eligible medical expenses over 3% of the dependent’s net income or $2,397, whichever is less. Receipts for medical expenses must be retained and the expenses must not be reimbursable or reimbursed. 

Residents of other Canadian provinces and territories may be able to claim a federal non-refundable tax credit equal to 15% of eligible expenses over $2,397.00 or 3% of the dependent’s net income, whichever is less. A similar provincial or territory non-refundable tax credit may also be available at varying amounts. 

Residents of some Canadian provinces and territories may have a minimum threshold and maximum amount of eligible expenses that can be claimed within the provincial or territorial tax credit. However, the province of Quebec has no maximum threshold for medical expenses for supporting a dependent elderly parent or grandparent and the net income of the dependent is not taken into consideration. 

The list of eligible medical expenses may differ from province/ territory to province/territory and are updated from time to time, so Canadian residents should check with their SLF adviser to determine if the medical expense qualifies. 

In certain circumstances, a federal non-refundable tax credit of 15% of home accessibility expenses (up to a maximum of $10,000 of expenses) may be claimed for your parent or grandparent, however, the provisions for the tax credit are complex and specific conditions apply. 

In the 2020 taxation year, a $1,250 refundable caregivers tax credit may be available if you live with your parent or grand-parent, who does not have an impairment, for a minimum period of 365 consecutive days, 183 days of which fall in the 2020 tax year. The parent or grandparent must be at least 70 years of age at the end of 2020, and you must be taking care of them. 

A second part of this credit for up to $1,250 may be available if a parent or grandparent has a severe and prolonged impairment in mental or physical functions in performing basic activities of daily living. You must have provided care for this person for at least 365 consecutive days including at least 183 days in 2020. The credit for this part may be reduced if the parent or grand-parent’s net income exceeds $22,180 and is eliminated once the income of the parent or grandparent reaches $29,992.50.