Who Can be Claimed as a Dependent?
Eligible dependents are normally your closest relatives. As much as we love to care for our loved ones, it can be expensive, so it’s nice to know that there are a number of credits and deductions that you can claim for your qualifying dependants in order to help you out.
When thinking of who qualifies as a dependant, people usually think of children, but other relatives can also qualify! In general, if a person lives with you and relies on you for either physical or financial support you may be able to claim them as a dependant for income tax purposes.
Who is an Eligible Dependent?
Whoever qualifies as a dependant will vary based on the credit or deduction that you wish to claim. Different people can qualify as dependants, and someone who qualifies as a dependant for one credit may not always qualify as a dependant for another credit, so you need to know the rules.
The most common types of dependants are:
- Children and grandchildren (either biological, adopted or stepchildren);
- Parents and grandparents;
- Brothers or sisters (including brothers-in-law and sisters-in-law); and
- Nieces, nephews, aunts or uncles.
How Does Claiming an Eligible Dependent Work?
If you claim a qualifying dependant on your tax return, you will have access to tax credits and deductions that can reduce what you owe to the Canada Revenue Agency. Different credits are based on different things, some are based on the age of the dependant or their relationship with you, while some are based on the dependant’s health or even income level. That is why it is important to know all the ways that you can claim a dependant, and to make sure that you are doing it correctly.
Eligible Dependent Credit
This credit is designed for single parents who are not claiming spousal/ common-law partner credits and are responsible for the financial care of a relative. Single or separated parents who are not supported by or living with the other parent of the child may also claim this credit. It is important to know the rules for when you can and when you cannot claim this credit.
To claim this credit, the dependant must live in your home and you must maintain this home yourself. For example, if you have a dependant but you live in a home maintained by your parents you cannot claim this credit. You also cannot claim this credit for someone who is merely visiting you. Only one person per household is permitted to take this credit, regardless of the number of dependants living in the house. If you and your partner share custody of the child, you must agree on who should take this credit. If you cannot agree, then neither of you are permitted to claim it.
Can Children Over 18 Still be Claimed as Eligible Dependents?
Despite the reality that many parents continue to financially support their children after they turn 18, you are generally are not allowed to claim them as a dependant. However, there are still some ways you may be able to claim your children on your taxes. The following are helpful rules to remember to save some money on your next return:
- If your child was 17 at some point during the tax year, they are considered dependants and can be claimed for the entire year;
- Mental or Physical Impairment – if your child is unwell and older than 18, you’ll require a letter from a doctor describing their condition before you will be permitted to claim them as a dependant;
- If you’re a single parent and claiming the amount for an eligible dependant, you need to deduct the income that your child earned from the amount that you are claiming;
- Although most post-secondary students are over 18 and therefore cannot be claimed as dependants, it is important to know that they can transfer up to $5000 in tuition and education credits to you if they do not use all of them on their own tax return; and
- If your child is over 18 but you continue to pay for their medical expenses you may be able to claim these depending on your child’s net income.
The Canada Caregiver Amount
The Canada Caregiver Amount helps people that care for family members who are elderly or are impaired. You may qualify for this credit if you support a relative who Is over the age of 18 and who at some point during the year in question was dependant on you due to a physical or mental impairment.
So if you have people in your life that rely on you for support, make sure that you know if they qualify as a dependant for your taxes. If you want help with that, contact our firm for a free consultation so that we can help!
This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in this article. If you have specific legal questions you should consult a lawyer.
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