Examples – How to claim attendant care expenses and the disability tax credit
Disclaimer
We do not guarantee the accuracy of this copy of the CRA website.
Scraped Page Content
Examples – How to claim attendant care expenses and the disability tax credit
Example 1
John is a 38-year-old who lives in his own home. His only income is a disability pension of $29,000. John's doctor has certified in writing that John is dependant on others for his personal needs because of his physical impairment. The Canada Revenue Agency (CRA) has approved Form T2201 for him. John pays his 43-year-old neighbour, Marge, $14,000 each year to look after him full-time. John can claim the amounts he pays Marge, for attendant care as a medical expense.
John has a choice to make. His first option is to claim $10,000 of the attendant care expenses as a medical expense on line 330 of his income tax and benefit return and claim the disability amount of $7,899 on line 316. Under this option, he would have no federal tax to pay.
His second option is to claim all $14,000 of his attendant care expenses as a medical expense, but then he would not be able to claim the disability amount. His federal tax would be $381.
For John, the first option is better. See the following for a breakdown of John's claims on his income tax and benefit return using both options.
Option 1:
John's net and taxable income : $29,000
Line 300 - Basic personal amount $11,327
Line 314 - Pension income amount: $2,000
Line 316 - Disability amount: $7,899
Line 330 - Medical expenses: $10,000 − $870 (3% of net income) = $9,130
Line 335 - Total federal non-refundable tax credits (add lines 300 to 330): = $30,356
Line 420 - Net federal tax: $0
Option 2:
John's net and taxable income: $29,000
Line 300 - Basic personal amount: $11,327
Line 314 - Pension income amount: $2,000
Line 316 - Disability amount: $0
Line 330 - Medical expenses: $14,000− $870 (3% of net income) = $13,130
Line 335 - Total federal non-refundable tax credits (add lines 300 to 330): = $26,457
Line 420 - Net federal tax: $381
Example 2
Judy is 57-year-old who earned $40,000 of pension income last year. She was seriously injured in a car accident a few years ago and now needs full-time attendant care. The CRA has approved Form T2201 for her. Last year, Judy paid $32,000 to a retirement home. Of that amount, $21,000 was her share of the salaries and wages paid to staff for attendant care.
Judy has a choice to make. Her first option is to claim $10,000 as medical expenses on line 330 of her income tax and benefit return and claim the disability amount of $7,899 on line 316. Under this option, Judy would have to pay $1,496 in federal tax.
Her second option is to claim all $21,000 of her attendant care expenses as a medical expense, but then she would not be able to claim the disability amount. Her federal tax would be $1,031.
For Judy, the second option is better. See the following for a breakdown of Judy's claims on her income tax and benefit return using both options.
Option 1:
Judy's net and taxable income: $40,000
Line 300 - Basic personal amount: $11,327
Line 314 - Pension income amount: $2,000
Line 316 - Disability amount: $7,899
Line 330 - Medical expenses: $10,000− $1,200 (3% of net income) = $8,800
Line 335 - Total federal non-refundable tax credits (add lines 300 to 330): = $30,026
Line 420 - Net federal tax: $1,496
Option 2:
Judy's net and taxable income: $40,000
Line 300 - Basic personal amount: $11,327
Line 314 - Pension income amount: $2,000
Line 316 - Disability amount: $0
Line 330 - Medical expenses: $21,000 − $1,200 (3% of net income) = $19,800
Line 335 - Total federal non-refundable tax credits (add lines 300 to 330): = $33,127
Line 420 - Net federal tax: $1,031
- Date modified:
- 2016-01-04