The $2,000 Family Caregiver Credit was announced more than a year ago but 2012 is the first year it can be claimed on your tax return. The amount is meant to provide a little extra tax relief for families caring for relatives who suffer from an impairment.
The credit is not designed to be claimed by itself, but rather added to an existing amount.
Unlike the caregiver amount, taxpayers with a spouse or common-law partner who is impaired will be allowed to claim the Family Caregiver Credit. So the $2,000 would be added to the spousal amount for a total credit of $12,822.
Families already claiming the caregiver amount can add the $2,000 to the credit for a total of $6,402. The same applies for children younger than 18, the amount for eligible dependants or the amount for infirm dependants age 18 or older.
The eligibility criteria for the family caregiver amount are substantially less stringent than the disability tax credit. If you have more than one dependant who is mentally or physically impaired, the additional $2,000 may be claimed for each dependant. However, if the dependant qualifies for both the child amount and the amount for an eligible dependant, the family caregiver amount may only be claimed once.
The degree of mental or physical impairment required for the family caregiver amount is different for children 17 or younger than for dependants 18 or older. For children younger than 18, the child must have an impairment in physical or mental functions. It must be prolonged and indefinite and the child must be dependent on others for assistance in attending to personal needs and care when compared to children of the same age.
Family members 18 or older must simply by dependent on the taxpayer because of an impairment in physical or mental functions. It is a good idea to obtain a letter from your doctor to support your request if you are claiming the Family Caregiver Amount.
Remember, temporary illness is not classed as an infirmity and would not be eligible for the credit.
If you are caring for an aging relative or a disabled child, the Family Caregiver Amount will mean an additional $300 in tax savings. But it is a non-refundable credit, so you need to have income in order to take advantage.