Windsor Parkinson Meeting February 25, 2014

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"Don't forget Valentine's Day

Parkinson Society Southwestern Ontario.png Parkinson SW rgb EN.jpg

Parkinson home.jpg . . Welcomes Guest Speaker : Joyce Paquette, an Income Tax specialist

will be presenting " a discussing all of the credits that are available ."

February 25, 2014 Joyce Paquette

Disability Deductions

  • Family Caregiver Amount (FCA)

When the dependent is infirm, the credit provides a $2040 "Bump" in the value of four tax credits:

    • The Spousal Amount
    • The amount for eligible dependent
    • The Amount for Children Under 18
    • The Caregiver Amount
  • In order to claim this amount, a statement signed by a medical doctor is required showing what the impairment is, when the impairment began and what the duration of the impairment is expected to be.

Disability Deductions.

Example

  • Jennifer does not work due to her disability, so Charles can claim her.
    • He will claim 11038 for himself
    • He will claim 11038 for Jennifer Plus 2040 (Family Caregiver Amount) for a total of 13078


  • lf Jennifer has qualified for the disability amount by submitting the form T22Ol and getting approval there will also be a deduction for 7697 over and above the I3078 already claimed.

So you see there are substantial tax savings. Please remember these are non-refundable credits net refunds.

  • This means a tax savings of approximately 1850 in tax dollars. Again not cash in your pocket. It means if you did your tax return without these credits and you owed for eg 2000 you would now only owe 3000 - 1850 =1150 Again great savings . If you were in a refund situation it could increase your refund by approx. 1850
  • Please note: If Jennifer had income the deductions must first be applied to her return and if they are no all needed on her return to decrease her net income to zero, the and only then they can be transferred to her spouse. These transfers also apply if for eg. a parents living with you and the deductions are not needed on the parents return. You must be living under the same roof, or deemed to be living under the same roof.


  • Let's go back to Disability amount.
    • it is 7697.
  • If you do not require the full disability amount to reduce your federal taxes to zero, you may transfer the unused portions of the credit to a supporting person.

As a non-refundable credit, the disability amount reduces the taxpayer's tax bill by 7697 x 15% = 1154.55 regardless of income on the federal level.

  • In addition, the Ontario provincial disability amount is 7735, the savings on provincial level would be 7735 x 5.05% = 390.62

Total savings on return would be 1154.55 + 390.62+1545.17

Explanation of conditions for disability

  • (a ) A prolonged impairment is one that has lasted or is expected to last for a continuous period of at least 12 months.
  • (b ) A severe impairment in physical or mental function must restrict the patient all or substantially all of the time which is another way of saying 90% of the time or more.


Examples That Qualify

  • You will be considered markedly or in some cases significantly restricted if all or substantially all of the time you have difficulty performing one or more of the basic daily living activities listed, even with the appropriate therapy, medication and devices.

Examples That Qualify

  • Speaking
  • Hearing
  • Walking
  • Elimination ( bowel or bladder functions )
  • Feeding
  • Dressing
  • Mental functions necessary for everyday life.

Life Sustaining Therapy

  • Those who require life sustaining therapy will qualify as well , if the therapy is required to support a vital function and the therapy is needed at least 3 times per week for an average of at least 14 hours per week. This includes the daily adjusting of medication and the time spent by a primary caregiver performing and supervising activities for a disabled child.


Home and Attendant Care

  • There are some special rules in making this claim if home or attendant care is involved. You may not claim both the costs of nursing home care or fulltime attendant care as a medical expense, together with the Disability Amount.

One or the other can be claimed but not both.

Home and Attendant Care

  • Those who pay someone to come into the home to provide care for the sick may claim expenditures up to $10,000 ( $20,000 in the year of death ) as medical expenses and still claim the Disability Amount.

Individuals who qualify for the disability amount will also be considered to be infirm for the purposes of the Amount for Eligible Dependents, the Amount for infirm Dependents and the caregiver amounts.

Home and Attendant Care

  • Individuals who care for someone with disability credit may be able to also claim medical expenses for them if they are not needed on the disabled person’s tax returns. There are some limitations, but be aware of the deduction.


  • There is a deduction a lot of people are not aware of . It is called Disability Supports Deduction.

Unlike the disability credit, which is a non-refundable credit, this is a true deduction against income. It is found on line 215 of the tax return.

  • If you are disabled and incur expenses of an attendant or other disability supports purchased to enable you to earn employment or self- employment income or to pursue education, then you can claim the costs of disability supports, so long as the expenses were not reimbursed. There are some limitations, but be aware that this deduction is only if the expenses are to aid you to work, whether employed or self-employed and to attend school.

Caregiver Amount

  • If you provide care for an infirm defendant in your home, you may be eligible to claim the Caregiver Amount if you dependents net income is less than 21,864

This is new for 2013.


Caregiver Amount

  • The maximum claim for the Caregivers Amount is 4490 if the defendant is not infirm. This definition refers to situations where children look after their parents age 65 or older, who are not infirm. If the defendant is infirm, the claim is 6530 ( 4490 plus 2040 Family Caregiver amount ) =6530

Caregiver Amount

  • In either case, the claim is reduced by the defendants net income in excess of 15334 And will be zero if dependents income is 21684 or more.

CPP Disability Benefits

  • Are separate from any of the deductions we have discussed - For CPP Disability Benefit purposes, this refers to a mental or physical disability that regularly restricts the person from doing any type of substantially go gainful work. Prolonged means the disability is likely to be long term and last indefinitely or will likely result in death.


CPP Disability Benefits

  • You can apply for the benefits retroactively, but only for 11 prior months.

When you qualify for CPP Disability Pension a Children's Benefit is also available, if the child is your natural or adopted child or a child in your care and custody, and either under the age of 18 or between 18 and 25 and attending a recognized school or university full time. The child will report that income.

THE BOTTOM LINE

  • Illness is a life event that has multiple tax consequences in the family both for the disabled person and their caregivers. It may require a visit to a professional to get your taxes completed to be sure you do not miss valuable deductions.

THE BOTTOM LINE

  • Be sure to involve a legal advisor for the completion of the will the Power of Attorney and health care directive. A financial advisor can assist with the planning of investments, withdrawals and insurances and the tax advisor with complex and often missed tax provisions, especially in a year of change.


THE BOTTOM LINE

  • In regards to taxes, if deductions have been missed in the past, we can go back 10 years for changes.

THE BOTTOM LINE

  • That means we can change as far back as 2003

February 25, 2014 Joyce Paquette

Some information links below.
Meeting Followup

You may direct your questions and comments about his page to Rick's Clicks
Use Rick's online contact form HERE.


Windsor Parkinson’s Support Group



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