Financial Facts and Tips for Caregivers

Transcription

1 Financial Facts and Tips for Caregivers Panelists: Shelby Parkinson, Liberty Tax Services Salina Dewar, Disability Alliance BC Host & Moderator: Janet McLean, Family Caregivers of British Columbia

2 Who We Are Family Caregivers of BC (FCBC) is a non-profit charity dedicated 100% to the wellbeing of family caregivers. 28 years, first of it s kind in Canada. Serving BC since 2010, past 4 years as part of the Ministry of Health s Patients as Partners Initiative. 2

3 What We Do: What You Can o: CAREGIVER SUPPORT Information, referral & navigation 1-1 Caregiver Coaching Support Groups Online Resource Centre Call Call for referral assessment Visit for listing Visit for resources EDUCATION Online Resource Centre Webinars & Workshops Events & Presentations Visit for listing Caregiver Connection Newsletter & enews COLLABORATION & ENGAGEMENT Health System Improvement Participate in Research Contact us to engage as a voice for family caregivers in the health care system 3

4 Webinar Norms Confidentiality is essential. Each person has the right to take part in the discussion or not. Every group member is welcome to provide feedback. Equal sharing time for all members. Be aware that experiences expressed are unique and may not reflect your own. 4

5 Learning Objectives As a result of this webinar, participants will: Apply information and tips shared by panelists. Take note of information and tips that may apply to their own caregiving situations. Consult with financial / tax experts in their communities. PLEASE participate interact in the chat box or put your hand up to speak!! 5

6 Panelist: Shelby Parkinson Shelby Parkinson Liberty Tax Service Shelby Parkinson has been a Liberty Tax Service franchise owner since 2009 and owns 3 offices in Victoria. She keeps upto-date on tax matters through continuing professional education. Shelby is active in the Victoria Chamber of Commerce and works with a number of local organizations including the March of Dimes, Victoria Grizzles Hockey Team and Young Life. Before joining Liberty Tax Service, she worked at a number of nonprofit organizations across Canada. Shelby Parkinson LIBERTY TAX VICTORIA libtaxvictoria@shaw.ca 6

7 Panelist: Salina Dewar Salina Dewar is a Tax Program Advocate with the Disability Alliance BC. She helps people who receive assistance for Persons With Disabilities (PWB) or Persons with Persistent and Multiple Barriers to employment (PPMB) file income tax returns so they can access the tax benefits they re entitled to. She also assists with clients applications for the Disability Tax Credit. Salina Dewar Disability Alliance BC Salina practiced family law for a few years before shifting to work that is closer to her heart. She is a lifelong learner with a commitment to human rights and social justice. For free PWD or PPMB tax help or help with a DTC application: or locally: (604) Tax Aid taxaid@disabilityalliancebc.org Help with Disability Tax Credit: rdsp@disabilityalliancebc.org 7

8 Facts and Tips Tax Credits Simply caring for someone does not mean you are a caregiver for tax purposes. The tax status of the person you are caring for will determine whether or not you can claim any credits on your own tax return. When someone is unable to fully look after their own affairs, it is important to have a representative registered with CRA who can call and get information. Completing the person-incare s tax return should be done first. 8

9 Facts and Tips Caregiver Def n The word caregiver means a person who may be responsible for a dependant or infirm relative. Age and living in the same household are NO LONGER determinants. 9

10 Caregiver Tax Credit Changes 17 The Federal Caregiver Tax Credit has changed significantly! It is more complicated to claim but the goal is to make it more generous for all families who care for infirm family members. Age and living in the same household are NO LONGER determinants. Income (of the person in care) and having a doctor or nurse-practitioner state in writing that someone is dependant (or has the DTC) will determine eligibility. 10

11 Caregiver Tax Credit Changes 17 There are two parts to the new Federal Caregiver Tax Credit: A mini amount of $2,150 for a minor child or older dependant with no income. Claim this on line 305 of the IT return. If you are able to claim all or part of the spousal / eligible dependant amount you can claim the mini credit. A maxi claim of up to $6,883 is also available (which is never claimed for a minor child). This is the complex part! 11

12 Caregiver Tax Credit Changes 17 Maxi Care Giver Credit If the dependant s income is between $11,635 and $16,163, claim the full maxi credit of $6,883. If the dependant s income is between $16,163 and $23,046, claim the maxi amount minus income over $16,163. Example: Sheila is married and cares for her infirm father whose income is $18,000. (Her dad doesn t have to live with her - just be dependent on her care). She could have a caregiver claim of: $6,883 - ($18,000 - $16,163) = $5,

13 Caregiver Tax Credit Changes 17 However, there are cases where one can top up the caregiver claim! Example: Peter is infirm with a net income of $9,000. He is married so his wife can claim: Spousal amount of $11,635 - $9,000 = $2,635 Mini credit of $2,150 But that is not all 13

14 Caregiver Tax Credit Changes 17 Together these credits total $4,785 so credits can be topped up with the maxi CG claim: $6,883 - $4,785 = $2,098 for a portion of the maxi CG The tax return would have : line 303 $2,635 line 305 $2,150 line 304 $2,098 A total of $6,883 in claims would be available (plus any other non-refundable tax credits). 14

15 Facts and Tips Home Reno Credits Home Accessibility Renovation Credit In 2016 the federal government added a tax credit for households where a resident has the DTC. Reno s up to $10,000 to make a home more accessible can be claimed on both the federal and BC provincial taxes. These types of expenses can be claimed as both a renovation credit and a medical expense. This is one time where double dipping in allowed! Keep all receipts and records because CRA will likely ask for them. 15

16 Facts and Tips Disability Tax Credit The Disability Tax Credit (DTC) is a nonrefundable tax credit that reduces the amount of taxes you pay. It is also the qualifying factor to open a Registered Disability Savings Plan (RDSP). It may help you to access Working Income Tax Benefit Disability Supplements. 16

17 Facts and Tips Disability Tax Credit A qualified practitioner must certify the applicant has a severe and prolonged impairment in mental or physical functions. A prolonged impairment is expected to last at least 12 months. A severe impairment is: Being markedly restricted in at least one basic activity of daily living (e.g. vision, speaking, feeding, hearing, walking, eliminating, dressing and mental functions necessary for everyday life) or; A cumulative effect of significant restrictions in any two of the above, that exist together substantially all of the time (at least 90%) or; You need life-sustaining therapy to support a vital function, and you need this therapy at least three times a week, for an average of 14 hours a week. 17

18 Facts and Tips Disability Tax Credit Obtain the Disability Tax Credit Certificate (form T2201) from the Canada Revenue Agency (CRA). Fill out the front page of the form, on your own or with help from a support person. Take the form to a doctor or other qualified health professional to be completed (doctors are allowed to charge a fee for filling out the form). 18

19 Facts and Tips Disability Tax Credit Consider taking a sample of a completed form to your doctor. Include information on your disability s day-to-day effects. This will help your doctor and make your application more accurate. The government may ask the doctor to provide more information which can delay a decision. Send your completed application form to the Winnipeg Tax Centre. CRA will send you a DTC eligibility decision letter, usually within a few months. 19

20 Facts and Tips Disability Tax Credit Even though someone may have qualified for federal or provincial disability benefits, they may not qualify for the Disability Tax Credit (DTC). The DTC can help reduce the amount of taxes owed. If approved, the tax credit can be applied to the person with the disability to the extent needed to reduce taxes to $0. It is then possible to transfer remaining credit to another family member (if the person is living in the same household). 20

21 Facts and Tips Medical Expenses Medical expenses over 3% of net income can be deducted from income. Refer to the CRA website for a list of allowable & non allowable expenses. Receipts are not submitted when filing the tax return BUT taxpayers who claim medical expenses are frequently asked to send in receipts for review after tax filing. It is wise to keep all receipts organized just in case 21

22 Facts and Tips Caregiver Amounts To use medical expenses of your dependent on your tax return, you must be related and the dependant must live with you. The dependant must use up all the credits & deductions they need first. NOTE: The caregiver must have actually paid for the expenses out of their own funds. If you are related to your dependant, if the dependant lives with you and if the dependant has the DTC but does not need to use all of it, it is possible to transfer remaining credit to your taxes. 22

23 Facts and Tips RC Expenses For full time residential care, claim EITHER the DTC or the nursing home expense (after the 3% medical expense is deducted). For attendant care, the residential care facility must provide a receipt with the breakdown of expenses (room and board are not deductible). If the DTC is on record, then there are 2 possibilities for claiming the medical expense deduction for attendant care: Claim a maximum of $10,000 AND the DTC (this is if the attendant care expense is over $10,000) OR Claim the entire amount of the attendant care expense and do not claim the DTC. 23

24 Facts and Tips Other Income splitting between spouses may be beneficial but requires planning (avoid if RC is foreseeable). For younger adults with disabilities: If the person is earning income they should definitely apply for the Disability Tax Credit. There is a disability supports deduction which allows one to claim expenses which are necessary to allow the person to work and were not used as medical expenses e.g. braille devices, sign-language services, voice recognition software, optical scanners. The key is that there must be earned income. This is form T929 on the tax return and the form gives details on the calculations. 24

25 Facts and Tips Process Determine total income - include all slips for pensions (CPP, OAS, RIF s, foreign pensions or other pensions usually found on a T4A). Investment income - T3 or T5 slips from banks and brokerages. If investments were sold, there may be capital gains so you should check with the advisor. 25

26 Facts and Tips Further Info Call the Canada Revenue Agency CRA General Income Tax Inquiries Benefits Inquiries Line Visit CRA Online The website has extensive information and resources available about income taxes and supports for people with disabilities. New EI Family Caregiver Benefit - ment-socialdevelopment/campaigns/eiimprovements/adult-care.html 26

27 Questions for Our Panelists 27

28 Question I am a caregiver for my mother who lives in the same community. She is fairly functional but showing signs of dementia. If I had her move in with me, would I be eligible for any financial assistance or tax relief? 28

29 Question I am caring for my parents who live together but are becoming increasingly frail. I have been helping with meals and transportation but I can see these needs increasing. If I quit my job to support them, would I be eligible for any financial assistance or tax relief? 29

30 Question The person I care for has (name of condition or disability). Do they qualify to receive the Disability Tax Credit? 30

31 Question The person I care for receives CPP-Disability benefits. Doesn t s/he already qualify for the DTC? 31

32 Question The person I care for has a permanent condition that is not going to improve. They have been approved for the DTC. Do they need to re-apply? 32

33 Question The person I care for is 59 now. If they are approved for the DTC before they turn 60, can they open an RDSP? 33

34 Question The person I care for is 49 now. If they are approved for the DTC before they turn 50, can they open an RDSP and get free government grants and bonds? 34

35 Quick Poll How many of you learned something tonight that will help you with your finances? 35

36 Webinar Action List As a result of this webinar I will: Start Stop Continue Visit for additional resources on relevant caregiving topics. 36

37 Don t Care Alone CALL US Caregiver Support Line: toll free Browse our Website Caregiver Support Groups Upcoming & Recorded Webinars Articles and Resources Newsletter Thank you! 37