Age Friendly Tax Tips

It’s hard to believe that another tax season is upon us!  But since there is no denying it, I thought it would be worthwhile to pass along these Top 10 Age Friendly Tax Tips!  These tax tips are particularly relevant to those over the age of 65 or those living with a disability. So, whether you file your own taxes or you help an older family member do so, please do a quick review of the following: 

1. Make sure to file a tax return! It may sound strange but too many Canadians don’t file a tax return because they don’t earn an income or their income level is such that no taxes are due. However, without filing a return, other credits and benefits that they may be eligible for will not get triggered. As an example, in order to receive the Guaranteed Income Supplement (GIS) – GST/HST credits and Ontairo Sales Tax credits, a return needs to be filed.
2. Check eligibility for the disability tax credit: Too many Canadians are also not applying for the Disability Tax Credit(DTC) which they are entitled to if they have a severe and prolonged impairment in physical or mental functions and meet certain conditions. Form T2201 which is certified by a medical practitioner is required to be filed with Canada Revenue Agency but this is a one-time requirement. The DTC also opens up the ability to apply for other programs like the Registered Disabilty Savings Plan and other medical credits so please be sure to apply. And please don’t hire a firm to apply for you. Talk to an accountant or connect with us for the form. As of this year, nurse practitioners across Canada can now certify the application form T2201. 
3. Medical expenses: Medical expenses can increase with age and a disability. All Canadians are entitled to deduct medical expenses that exceed 3% of their net income but spouses can add their medical expenses together in order to get a larger credit. The list of eligible medical expenses has expanded slowly over the years so it’s worth checking to make sure you’re deducting everything possible.  Some are obvious and some are more obscure. 
4. Pension income splitting with a spouse: Splitting up to 50% of eligible pension income with a spouse can mean a significant tax reduction especially if one spouse earns less income than the other and also because it allows a family to claim two pension income tax credits of $2,000 each. 
5. The Canada Caregiver credit: This new credit for 2017 replaces the family caregiver credit, the credit for infirm dependants and the caregiver credit (for in-home care of a relative). The new credit is a non-refundable tax credit that a family caregiver maybe eligible to take if they support a spouse, child or eligible relative that has a physical or mental infirmity at any time in the year.
6. Attendant care expenses: These expenses can be claimed as a medical expense if an individual is living at home or in a care home. If such costs are incurred in order to be employed or self-employed they may also be claimed to reduce income as part of the disability supports deduction.
7. Nursing home/Long Term Care expenses: These expenses for full time care can be deducted as a medical expense either by the individual cared for or by the individual paying the expense subject to limits. You can’t claim the cost of nursing home care AND the disability tax credit but you could instead deduct the attendant care portion of such fees so it’s important to strategize around what makes more sense.  It can get complicated.
8. Home Accessibility Tax Credit (HATC); Beginning in 2016, this new non-refundable credit allows those eligible for the disability tax credit, a credit of 15% to a maximum of $1,500 on eligible expenses incurred to renovate a home to make it more accessible or to improve mobility. That works out to a claim for up to $10,000 in home improvement expenses. Individuals must be over 65 years of age or eligible for the disability tax credit. Expenses would include such things as wheelchair ramps, walk in bathtubs, widening of doors, non slip flooring, hands-free taps, motion sensored lights etc. 
9. Other Age Friendly Tax Credits can be shared! Those over 65 are also eligible for the (income based) Age Amount and the $2,000 Pension Amount.  These federal tax credits may also be transferred to a spouse if one of the spouses cannot use all of their credits. Other credits that can be transferred include the Disability amount and Tuition expenses.
10. Ontario Senior Homeowners’ Property Tax Grant: For those who are 64 or older, a resident of Ontario and paying property taxes, a property tax grant of up to $500 is possible based on income.

If you need help filing your return and have a very modest income and a simple tax situation then you may be eligible to have your tax filings prepared by a volunteer tax clinic in the area. You can find one by checking the CRA website or by calling 1-800-959-8281 or checking with a local community help service; they should be able to direct you to one. New this year, 950,000 Canadians will be invited to file their taxes over the phone with a new program “File My Return“. This new service will invite eligible individuals with simple tax situations file their returns by answering a few questions over the phone through an automated service. This is good news most particularly for those who are eligible for federal support programs who are not receiving them because they don’t file a return. 

Also of note is the fact that Canada Revenue Agency will mail 2017 income tax returns and benefit guides to all those who paper filed previously. I welcome this Age Friendly move as previously, those individuals had to try their luck at finding a post office with a supply of returns available; often to find there were none available. It helps to make complaints !