If you care for and support a family member, the former system provides three tax credits: the infirm dependant credit, the caregiver credit, and the family credit, all intended to compensate you for part of the non-discretionary, out-of-pocket expenses.
Infirm dependant credit is a 15% non-refundable tax credit for individuals who support an adult family member (other than your spouse or common-law partner) who is dependent on you by reason of physical or mental infirmity. They do not have to live with you to claim this credit.
Caregiver credit is a 15% non-refundable tax credit available to individuals who provide in-home care to family members who are either parents or grandparents 65 years and older, or adult family members including a brother, sister, niece, nephew, aunt or uncle, who are dependent on you by reason of mental or physical infirmity.
Family caregiver tax credit is 15% of $2,121, and helps caregivers of family members who are dependent on them by reason of infirmity, through a top-up to the other dependency-related credits, which could be the caregiver credit, the infirm dependant credit, the spousal or common-law partner credit, or the eligible dependent credit.
The 2017 budget simplified and consolidated these three non-refundable tax credits into one: the new Canada Caregiver Credit (CCC), to support those who need it the most and extend tax relief to some caregivers who may not currently qualify due to the income level of their dependant. It provides tax assistance to caregivers for dependants who have an infirmity and are dependent on the caregiver for support by reason of that infirmity.
For 2017, the CCC amount will be $6,883 for infirm dependants who are parents or grandparents, brothers or sisters, aunts or uncles, nieces or nephews, or adult children.
The amount will be $2,150 for an infirm dependent spouse or common-law partners, an infirm dependant for whom the individual claims an eligible dependant credit, or an infirm child under age 18.
The CCC will be reduced dollar-for-dollar by the dependant’s net income above $16,163 (for 2017), and the dependant will not be required to live with the caregiver in order for you to claim the new credit. However, the CCC will no longer be available for non-infirm seniors who live with their adult children.