11 August 2011 External T.I. 2011-0394591E5 - Caregiver Amount

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: 1. What is meant by "maintained a dwelling" for the caregiver amount? Must the individual own the residence/home or could the residence/home be owned by the cared for individual(s)?
2. Where the individual otherwise qualifies for the caregiver amount, what type of documents would be needed to support the claim?
3. Can the previous years returns be adjusted for the caregiver amount, if same caregiver situation existed in prior years?
4. Could multiple claims for the caregiver amount be claimed in one tax year?

Position: 1. A question of fact. 2. Depends. 3. Likely. 4. Yes.

Reasons: Legislation and previous positions

XXXXXXXXXX 							2011-039459
								George A. Robertson, CMA
August 11, 2011

Dear XXXXXXXXXX :

Re: Caregiver Amount-credit

This is in response to your request concerning claiming the Caregiver Amount, specifically;

• What is meant by "maintained a dwelling" for the caregiver amount? Must the individual own the residence/home or could the residence/home be owned by the cared for individual(s)?
• If an individual otherwise qualifies for the caregiver amount, what type of documents would be needed to support the claim?
• Can previous year(s) returns be adjusted for the caregiver amount, if the same caregiver situation existed in prior years?
• Could multiple claims for the caregiver amount be claimed in one tax year?

Our understanding of the facts is:

• The individual [the son] maintains a dwelling where his parents live and reside, in Canada;
• Each parent had a net income of less than $18,645 [amount indexed for 2010] for the year 2010;
• Each parent was born in 1945 or before.
• The son owns the residence where his parents reside with him;
• The son is the highest income earner; pays the majority of the bills (property tax, property insurance, food, etc.)

Our comments

Paragraph 118(1)(c.1) of the Income Tax Act (Act) states, in part, in respect of the Caregiver Amount,

...in the case of an individual who, at any time in the year alone or jointly with one or more persons, maintains a self-contained domestic establishment which is the ordinary place of residence of the individual and of a particular person... [Emphasis added]

Since the term "maintains" is not defined in the Act, one must look to the meaning of these terms, as they are ordinarily defined and understood. Black's Law Dictionary defines "maintain" to include, "To care for (property) for purposes of operation, productivity or appearance; to engage in general repair and upkeep." Our view is that this definition can include a situation where an individual pays the expenses to maintain the self-contained domestic establishment even though the property is owned (or rented) in another person's name.

However, in order to do so, the individual will need to show that he/she does, in fact, maintain the residence either alone or jointly with the cared-for individual. Some examples of paperwork to support the maintaining of a dwelling could be, proof of the payment of: property taxes, home insurance policy, bills for repairs, telephone and utilities bills, etc. For more information on claiming the Caregiver Amount, please refer to the instructions for "Line 315 - Caregiver amount" in the T1 General Income Tax and Benefit Guide for the year in question or http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/315/rtrn-eng.html.

Provided the individual otherwise qualifies for the caregiver amount in previous years, adjustments to previously filed returns could be made within the normal three-year period for the caregiver amount. Part IV of IC 07-1 describes the guidelines for refunds or reduction in amounts payable beyond the normal three-year period. For information how to change your tax return please refer to http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/chngrtrn-eng.html.

Provided all other criteria for the caregiver amount have been fulfilled, there is no restriction on the number of eligible relatives that can be claimed for this credit. A Federal Worksheet and Schedule 5 has to be completed for each dependant, as each relative is eligible based on his or her particular relationship and net income.

While we trust that these comments will be of assistance, they are given in accordance with the practice referred to in paragraph 22 of IC 70-6R5 and are not binding on the CRA in respect of any particular situation.

Yours truly,

Sharmini Ratnasingham
Assistant Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch