In part 1 of this series, which discussed the various tax treatments of medical related expenses, Attendant Care Expenses were identified as a tax deduction subject to an income test. In this article, we will focus on the details of Attendant Care Expenses Tax Deduction.

There are a number of conditions you have to satisfy before expenses can be deducted. These include:

• You are qualified to claim the Disability Tax Credit (discussed in a separate article), although the tax credit might have been transferred to a spouse or supporting person.
• No one else has claimed the payments as Medical Expenses Tax Credit.
• The attendant is not your spouse.
• The attendant was at least 18 years of age at the time when payments were made.
• The attendant care must be provided in Canada (see exception below).
• Attendant Care is care provided by an attendant who performs those personal tasks which the person with a disability is unable to do for him or herself. Depending on the situation, such tasks could include meal preparation, maid and cleaning services, transportation, and personal services, such as banking and shopping. Attendant Care would also include providing companionship to the person with a disability. However, if a person is employed to do a specific task, for example, provide maid and cleaning services or transportation services, these would not qualify.
• The expenses were paid to enable you to earn income, receive occupational training for which you received a training allowance under the National Training Act, or carry on research or similar work for which you received a grant.
• Expenses not reimbursed or reduced by other assistance unless these amounts are taxable income not offset by deductions.
• Exception to the requirement that the attendant care be provided in Canada applies to those who are absent from Canada for all or part of the year but is a resident for tax purposes.

If the above conditions are satisfied, the Attendant Care Expenses can only be claimed by the taxpayer and are not transferable.

The amount that is deductible is subject to an "income test". The maximum amount that can be claimed is two-thirds of your "earned income". Earned income is the total of employment income, self-employment income, the taxable part of scholarships, bursaries, fellowships and similar awards, net research grants and any earnings supplement received under a project sponsored by a government in Canada to encourage employment.

If you fail the income test (i.e. you have no earned income and therefore there is no deduction for the Attendant Care Expenses), you can claim a maximum of $10,000 (or $20,000 in the year of death) as a Medical Expense Tax Credit. This tax credit can be transferred to your spouse or relative whom you are dependent upon. Medical Expense Tax Credit is discussed in greater detail in a separate article.


Next Part (Disability Tax Credit)

*CA PrimePlus Services is a registered trademark of the Canadian Institute of Chartered Accountants. Eldercare/CA PrimePlus Services is a customizable range of financial management services for elderly and disabled persons.

Anne Chun, C.A. CFP is the principal of Anne Chun Professional Corporation, providing financial, tax, estate and Eldercare services. She is also the co-author of "Planning your Financial Future".