22 September 1992 Internal T.I. 9223397 F - Transfer Of Disability Tax Credit & Personal Tax Credit

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

September 22, 1992

SYDNEY DISTRICT OFFICEPersonal and General SectionEnquiries and Office Examination

Attention: K. Markotich

Transfer of Disability Tax Credit

We are replying to your memorandum dated July 6, 1992 concerning the transfer of the disability tax credit from a parent to a supporting child.  Please note that we did not receive the facsimile transmission of same until August 6, 1992.

In the situation you presented, the taxpayer is a widow who is supporting in her residence her mother, who is physically infirm, and her son who is under 18 years of age.  For the year in question, the taxpayer has claimed her son for the equivalent to married tax credit although she could have claimed her mother had her mother's net income not been above the threshold.

You have asked whether the physically infirm mother could transfer the unused portion of her disability tax credit to her daughter, the widow.  While you believe that the daughter is entitled to the claim, you received contrary advice from the Hotline.  For the purpose of our response, we assume that the physically infirm mother is otherwise entitled to the disability tax credit and that the portion of the credit which the daughter seeks to deduct is the excess described in paragraph 7 of IT-519 "Medical Expense and Disability Tax Credits".  We also assume that no other person has made any claim under section 118 in respect of the physically infirm parent.

We agree with your view that the daughter can claim such portion of the disability tax credit as is available to be transferred from her mother.  In the situation where the taxpayer is not entitled to claim a tax credit under either paragraph 118(1)(b) or (d) for the person with the disability, the transfer of the tax credit from the taxpayer's child, grandchild, parent or grandparent will still be permitted if the taxpayer could have claimed such a deduction had the taxpayer been unmarried and had the person with the disability had no income.

In considering the hypothetical situation where the taxpayer was unmarried and the dependant had no income, no other existing facts (such as a claim for the equivalent to married tax credit in respect of someone else) are considered to have been changed.  Accordingly, in the situation you describe the daughter could not have claimed the equivalent to married tax credit for her mother under these two assumptions because she has already claimed this credit for her son: however, she could have claimed a tax credit under 118(1)(d) for her mother under these two assumptions and thus she is able to claim the unused portion of her mother's disability tax credit.

We regret any confusion that may have been caused by the telephone response from the Hotline.

P.D. FuocoSection ChiefPersonal and General SectionBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch

c.c. Assessment of Returns Directoratec.c  Client Assistance Directorate