Overview
Caring for a loved one with a disability or chronic illness is an act of compassion, but it often brings significant financial challenges along with the emotional toll. Whether it involves preparing special meals, coordinating therapy, or hiring extra help, caregivers frequently face expenses that add up quickly. Many take on unpaid responsibilities such as cooking, cleaning, and driving, or pay out of pocket for professional services like personal support workers or therapists. Hiring additional help can cost hundreds or even thousands of dollars each month.
In addition to these expenses, lost income due to reduced work hours can make it even more difficult to manage financially. Fortunately, several tax credits in Canada are designed to ease this burden. These include the Disability Tax Credit (DTC), the Medical Expense Tax Credit (METC), and the Canada Caregiver Credit (CCC), which can help offset some of the costs caregivers face.
Disability Tax Credit (DTC): How to Benefit from This Fixed Relief Option
The Disability Tax Credit is a non-refundable credit intended to support individuals with severe and prolonged impairments, as well as their qualifying family members. If your dependant—such as a parent, sibling, child, or grandchild—is eligible, he or she can claim a fixed amount set annually by the Canada Revenue Agency ($9,472 for the 2024 tax year, with adjustments for 2025) to reduce their income tax.
If your dependant’s income is too low to fully use the credit, the unused portion can be transferred to you. To qualify for the transfer, you must be a family member who regularly provides at least one basic necessity, such as food, shelter, or clothing.
Medical Expense Tax Credit (METC): Recovering Out-of-Pocket Medical Payments
If you’ve paid for care services such as a personal support worker (PSW) or therapist, you may be able to claim these through the Medical Expense Tax Credit (METC) on line 33199 of your tax return. This non-refundable credit helps reduce your taxes based on eligible medical expenses you’ve paid for yourself, your spouse, or a dependant. The total expenses must be more than either 3% of your net income or $2,779, whichever amount is lower. This threshold is updated annually.
You can claim certain caregiving expenses under the Medical Expense Tax Credit (METC) if you are supporting a dependant, as long as those expenses have not been reimbursed. The CRA’s RC4065 Medical Expenses – 2024 guide outlines the types of services that qualify. Here’s a breakdown:
Eligible Paid Services You Can Claim
- Wages or salaries paid to a personal support worker (PSW), registered nurse, or certified health care aide
- Therapy costs (such as occupational or psychological therapy) when prescribed by a doctor, nurse practitioner, psychologist, or occupational therapist (for mental or physical impairments occurring after September 7, 2017), and when the therapy is supervised by one of these professionals
- To claim therapy expenses, the dependant must be approved for the Disability Tax Credit (DTC). The therapy must be both prescribed and overseen by a qualified professional, and the person providing the service cannot be your spouse, partner, or someone under 18. The therapy plan must also meet one of the following conditions:
- Required to access public funding
- Prescribed for a mental impairment by a doctor, nurse practitioner, or psychologist
- Prescribed for a physical impairment by a doctor, nurse practitioner, or occupational therapist
- To claim therapy expenses, the dependant must be approved for the Disability Tax Credit (DTC). The therapy must be both prescribed and overseen by a qualified professional, and the person providing the service cannot be your spouse, partner, or someone under 18. The therapy plan must also meet one of the following conditions:
- Wages paid for support tasks may also be eligible, including:
- Housekeeping services in the dependant’s residence
- Laundry for the dependant’s personal items
- Activity planning or support (e.g., hiring a social programmer)
- Basic grooming services like haircuts or manicures if included in a staff member’s monthly fee
- Transportation assistance, such as paying a driver
- Security personnel for a secured living environment
If you’re performing the tasks yourself, like preparing specialized meals, the cost can’t be claimed under the METC since it isn’t a paid expense. The CRA only allows claims for salaries or wages paid to others, and eligibility often depends on approval for the Disability Tax Credit or a certification from a medical professional.
Canada Caregiver Credit (CCC): Acknowledging Your Role as a Caregiver
The Canada Caregiver Credit provides financial relief to individuals who support an infirm dependant, such as an aging parent. This fixed, non-refundable credit—up to $8,375 in recent years (subject to adjustment for 2025)—can be claimed if your dependant is over 18 and relies on you for care.
Unlike other credits, it does not require receipts or proof of paid expenses, making it especially helpful if you’re offering unpaid support, such as preparing meals. Eligibility depends on the nature of the dependant’s infirmity, often linked to Disability Tax Credit (DTC) approval, and their income level. If their income exceeds a certain threshold, the credit may be reduced. For full details, visit the CRA’s CCC webpage.
Tax Pro Tip: Maximize your relief with multiple CRA tax credits
The financial demands of caregiving can add up quickly, but several CRA tax credits can help lighten the load. Credits like the Medical Expense Tax Credit (METC), Canada Caregiver Credit (CCC), and Disability Tax Credit (DTC) can all be claimed together, as eligibility for one doesn’t exclude you from the others.
The CRA also provides other tax incentives for individuals with disabilities and their caregivers. If you’re unsure about your eligibility or want to understand how a specific arrangement might affect your claims, consult with one of our top Canadian tax lawyers for guidance.
Frequently Asked Questions (FAQs)
How do I Apply for the Disability Tax Credit?
To apply for the Disability Tax Credit, you need to submit a completed Form T2201, the Disability Tax Credit Certificate. The person with the impairment—or their legal representative—must first complete Part A of the digital form. After submitting it, they will receive a reference number to share with a medical practitioner, who will then complete the rest of the application.
Do I need to submit receipts when claiming the Canada Caregiver Credit or Medical Expense Tax Credit?
No, you don’t need to submit receipts with your tax return. However, it’s important to keep all receipts on file. For the Canada Caregiver Credit (CCC), the CRA may request a signed statement from a medical practitioner indicating when the impairment began and how long it is expected to last. This is not required if the dependant has already been approved for the Disability Tax Credit (DTC).
For the Medical Expense Tax Credit (METC), whether filing electronically or by paper, you should not send any supporting documents with your return. Keep your receipts in case the CRA asks to review them later. Receipts must include the name of the company or individual who was paid. If you paid an individual for attendant care or therapy, the receipt should also include their Social Insurance Number (SIN).
Receipts should clearly state the purpose of the payment, the date it was made, the name of the patient, and, if applicable, the name of the medical practitioner who prescribed or provided the service. The CRA may also ask for proof of payment, such as bank or credit card statements. If you are claiming expenses for a dependant aged 18 or older, you may also be asked to provide proof of support, such as a lease agreement or grocery receipts.
DISCLAIMER: This article just provides broad information. It is only up to date as of the posting date. It has not been updated and may be out of date. It does not give legal advice and should not be relied on. Every tax scenario is unique to its circumstances and will differ from the instances described in the articles. If you have specific legal questions, you should seek the advice of a Canadian tax lawyer.