Helping or supporting an elderly parent is an increasing fact of life, and can be a financial burden. Here are three tax saving tips from H & R Block to help. First off, you need to make sure your parents’ taxes are filed even if nothing is payable. This is particularly important if the parent or parents are receiving the Guaranteed Income Supplement (GIS). Like other government programs it depends on an up-to-date tax return.
If you are providing support you may be able to claim this amount. Your parent or parents must be 65 or over, have an income of $18,645 or less and be living with you. You can also claim parents under the age of 65 if they are dependent on you because of an infirmity or disability.
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Unfortunately, no matter how much support you provide, they have to be living with you in order to claim the caregiver credit.
There is a federal amount of $4,223 for each dependent which will cut your taxes by $635. There are also provincial caregiver amounts that will add to your savings.
Disability Tax Credit
I have written about this in the past, encouraging adult children to apply for the DTC if a parent qualifies for it. Many don’t realize that if the parent’s income is low, the DTC can be transferred.
However, in order to do this you need to establish that your parent depends on you for some or all of the basic necessities of life. This can be a huge benefit to the struggling sandwich generation.
Nursing home expenses
If you pay for your parents’ nursing home fees, you may be able to claim them as a medical expense. But you will have to make a choice between these expenses and the disability tax credit, because you can’t have both.