13 April 1999 Internal T.I. 9905867 - CAREGIVER 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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: Two parents (“Parent A” and “Parent B”), who are both over the age of 65, reside at the residence of their son (“Individual A”)and daughter-in-law. Parent B claims a credit under paragraph 118(1)(a) of the Act in respect of Parent A. In order for Individual A to be entitled to claim a credit under proposed paragraph 118(1)(c.1) of the Act in respect of Parent A, is it necessary that Individual A provide support to Parent A?

Position: No

Reasons: It is not a requirement within the Act that needs to be satisfied.

		April 13, 1999

	PETERBOROUGH TSO	HEADQUARTERS
	Suzanne Burden	M. Eisner
	Client Services	(613) 957-2138
		990586

Caregiver Tax Credit

This is in reply to your memorandum dated March 5, 1999 concerning the above-noted subject.

You have indicated that you are considering a situation where two elderly parents (“Parent A” and “Parent B”) live with their son (“Individual A”) and their daughter-in-law. Parent A and Parent B are both over 65 years of age. Parent A has a net income that is less than $2,000 and Parent B has a net income that is in excess of $14,000. Parent B claimed a spousal tax credit in respect of Parent A under paragraph 118(1)(a) of the Income Tax Act (the “Act”).

The issue is whether Individual A can claim the caregiver tax credit under proposed paragraph 118(1)(c.1) of the Act in respect of Parent A.

Our Comments

In relation to the above circumstances, proposed paragraph 118(1)(c.1) of the Act generally allows the caregiver tax credit to be claimed by an individual in respect of a parent who is a resident of Canada and is 65 years of age or older where the individual, either alone or jointly with one or more persons, maintained a dwelling in which the parent resided. The caregiver tax credit is also subject to an income test. Assuming Parent A is a resident of Canada, it is our view that Individual A would be entitled to claim the caregiver tax credit in respect of Parent A. Whether or not Parent B provided some support to Parent A or claimed a spousal tax credit in respect of Parent A is not a relevant factor in determining whether or not Individual A is entitled to claim the caregiver tax credit in respect of Parent A.

With respect to the spousal tax credit, the fact that Individual A claims the caregiver tax credit in respect of Parent A, is not, in our view, a relevant factor in determining whether Parent B is entitled to claim a spousal tax credit under paragraph 118(1)(a) of the Act in respect of Parent A. What is relevant is that Parent B must be considered to support Parent A. In our opinion, the fact that Parent A and Parent B live in Individual A’s residence does not, in and by itself, result in Parent B not having supported Parent A. Consistent with the comments under the heading “Support” in “Appendix A - Terminology” of Interpretation Bulletin IT-513R “Personal Tax Credits”, it is a question of fact whether Parent B supports Parent A.

If you require further technical assistance, we would be pleased to provide our views.

For your information, a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the legislation Access Database (LAD) on the Department’s mainframe computer. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the LAD version or they may request a copy severed using the Privacy Act criteria which does not remove client identity. Requests for this latter version should be made by you to Jackie Page at (613) 957-0682. The severed copy will be sent to you for delivery to the client.

Jim Wilson
Section Chief
Business, Property & Employment Section II
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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