MEDICAL EXPENSES, DISABILITY TAX CREDITS, AND ATTENDANT CARE EXPENSE DEDUCTIONS Presented by Marlene L. Grant, CGA Marlene L. Grant Professional Corporation April 1, 2013 Marlene L. Grant Professional 1 Corporation, April 2013 BRIEF HISTORY ABOUT MYSELF I am the owner of a small accounting practice. � Graduated from Algonquin in 1992 and obtained my Certified General � Accounting designation in 2002. Over 18 years accounting and taxation experience in the Ottawa area in � public accounting as an auditor and controllership positions within the private sector. Work extensively with owner-managed businesses, not-for profit � organizations and professionals. Providing accounting, assurance, taxation, business startup assistance � and software services to clients. 2009, 2010, 2011 and 2012 Nepean Chamber of Commerce award � nominee. 2011 Nepean Chamber of Commerce Business Woman of the Year � Nominee and Winner Marlene L. Grant Professional 2 Corporation, April 2013
SUMMARY The medical expense tax credit on line 332, the disability tax credit on line 316 and the attendant care expense deduction on line 332 all provide tax relief for individuals. The medical expense tax credit applies to individuals who have sustained � significant medical expenses for themselves or certain dependants. The amount of the medical expense tax credit is determined by multiplying the � lowest personal tax rate percentage (15%) by the amount of qualifying medical expenses in excess of $2,109 or 3% of net income on line#236 or whichever is less. The disability tax credit applies to individuals who have a “severe and prolonged � mental or physical impairment” or for individuals who support certain dependants with such an impairment as certified by an appropriate medical practitioner . The amount of the disability tax credit is determined by multiplying the lowest � personal tax rate percentage (15%) by $7,436.00. Marlene L. Grant Professional 3 Corporation, April 2013 SUMMARY continued In addition, any unused portion of the disability tax credit may be transferred to a � spouse or to a “supporting individual.” The attendant care expense deduction is available to individuals or their � dependants who are entitled to claim the disability tax credit and who have incurred expenses for personal care for dependants that are necessary to enable them to work. The maximum that can be claimed is $5,000.00. You may also be able to claim the caregiver amount for a dependant by multiplying � the lowest personal tax rate to $2,000 for each dependant. An individual may be entitled to receive a refundable medical expense tax credit in � respect of the same medical expenses for which a medical expense tax credit was claimed for lower income families A person entitled to a disability tax credit under the Income Tax Act mat not qualify � for a disability pension under the Canada or Quebec Pension Plan or under an insurance policy . Marlene L. Grant Professional 4 Corporation, April 2013
ELIGIBLE MEDICAL EXPENSES You can claim eligible medical expenses paid in any 12-month period ending in � 2012 and not claimed for 2011. Generally, you can claim all amounts paid, even if they were not paid in Canada. You can only claim the part of an expense for which you have not been or will not � be reimbursed. However, you can claim the full expense if the reimbursement is included in your income, such as a benefit shown on a T4 slip, and you did not deduct the reimbursement anywhere else on your income tax and benefit return. You may also claim the premiums paid to a private health services plan for the � period ending in the year. If more than one person supports the dependant, each supporting person may � claim the allowable amount of medical expenses as long as the total amount claimed by all supporting persons is not more than the total expenses paid. Travel expenses incurred � Marlene L. Grant Professional 5 Corporation, April 2013 ELIGIBLE MEDICAL EXPENSES continued The most common medical expenses are: Prescriptions drugs and medications; � Dental expenses; � Ophthalmology expenses; � Expenses paid to qualified medical practitioners or hospitals; � Transportation and travel expenses � Premiums to a private health insurance plan relating to medical and dental. � For a detail list of eligible expenses visit: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm- tx/rtrn/cmpltng/ddctns/lns300-350/330/llwbl-eng.html For a list expenses that are commonly claimed as medical expenses in error visit: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300- 350/330/ntllwbl-eng.html Marlene L. Grant Professional 6 Corporation, April 2013
ATTENDANT CARE You can claim amounts you or your spouse or common-law partner paid for � attendant care. The amounts must have been paid for the care of yourself, your spouse or � common-law partner, or a dependant. You can claim amounts paid to an attendant only if the attendant was not your � spouse or common-law partner and was 18 years of age or older when the amounts were paid. An attendant who is hired privately will probably be considered an employee. See � Guide RC4110, Employee or Self-Employed? , for more information . The fees claimed must be for salaries and wages paid for attendant care services. � If an individual issues a receipt for attendant care services, the receipt must � include the attendant’s name and social insurance number. Marlene L. Grant Professional 7 Corporation, April 2013 TRAVEL AND MEAL EXPENSES If you had to travel at least 40 kilometres (one way) from your home to obtain � medical services, you may be able to claim the public transportation expenses you paid (for example, taxis, bus, or train) as medical expenses. Where public transportation is not readily available, you may be able to claim vehicle expenses. If you had to travel at least 80 kilometres (one way) from your home to obtain � medical services, you may be able to claim accommodation, meal, and parking expenses in addition to your transportation expenses as medical expenses. To claim transportation and travel expenses, the following conditions must be met: � � substantially equivalent medical services were not available near your home; � you took a reasonably direct travelling route; and � it is reasonable, under the circumstances, for you to have travelled to that place for those medical services. Marlene L. Grant Professional 8 Corporation, April 2013
TRAVEL AND MEAL EXPENSES Continued You can choose to use the detailed method or the simplified method for � calculating meal and vehicle expenses. If you use the detailed method, you have to keep all receipts and records for your � 12-month period. You must provide receipts for all accommodation expenses and you must be able � to show that the amount paid for accommodation is necessary because of the distance travelled and your medical condition. Claim the amount for accommodation as shown on your receipts . Marlene L. Grant Professional 9 Corporation, April 2013 FAMILY CARE GIVER AMOUNT For 2012 and subsequent years, the family caregiver amount (FCA) may increase � the maximum for one or more of the following non-refundable tax credits by $2,000 for each of your dependants (including spouse,common-law partner, and minor children) who have an impairment in physical or mental functions. Your dependant must be: � � a person 18 years of age or older, and dependent on you because of an impairment in physical or mental functions; or � a child under 18 years of age with an impairment in physical or mental functions. The impairment must be prolonged and indefinite and the child must be dependent on you for much more assistance in attending to personal needs and care when compared to children of the same age. You must have a signed statement from a medical practitioner showing when the - � impairment began and what the duration of the impairment is expected to be. Marlene L. Grant Professional 10 Corporation, April 2013
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