Do you live in Canada and have dependants? Don’t forget to claim your tax deduction. Most Canadians know that spouses and children qualify as dependants with the CRA (Canada Revenue Agency). Did you know, however, that under certain circumstances other family members, like parents, can count as dependants too?
What are the rules for claiming dependants on taxes in Canada? Let’s dive into the CRA’s qualifications for eligible dependants.
The following family members count as dependants for tax credit purposes:
When claiming dependants on taxes in Canada, you may qualify for the tax credit for a child if:
If both parents share custody, either of them (but not both) can claim the dependant tax credit. The parents must agree on who declares the child as a dependant. If the parents can’t reach an agreement, neither of them can claim this particular deduction.
Please note that the Canadian government offers tax credits for parents of minor children, separately from dependant tax deductions. You may also check with your local jurisdiction to see if you qualify for province-specific child tax benefits or child disability benefits.
All children under 18 count as dependants if they live with you permanently. But what about college students who may depend on their parents for tuition, living expenses, and health insurance ?
If you’re funding your child’s post-secondary education, you may claim tuition costs for tax deduction purposes. Please note that if your adult child has any income, they need to file their tax return before you claim yours. Students typically have a low income, so their parents may expect a significant tax deduction.
To make it easier for Canadian taxpayers to estimate whether they qualify for a dependant tax credit, the CRA suggests you answer the three following questions.
The CRA allows taxpayers to claim parents, grandparents, children, grandchildren, and siblings as dependants. Children, grandchildren, and brothers or sisters usually must be under 18 to count as dependants unless they have a physical or mental handicap. Disabled persons may count as dependants with no age limit.
Here are a few other things to keep in mind if you plan to claim a tax credit for a dependant:
If you and your spouse or common-law partner separated in the course of the tax year, and you have a child who lives primarily under your roof, you may be able to claim that child as a dependant. However, you can only do so if you refrain from claiming spouse or common-law partner support amounts. Calculate which amount would be higher and file a claim accordingly.
Canadian citizens or permanent residents who temporarily leave Canada to work or travel abroad may still count as factual residents for tax purposes.
Factual residents must maintain residential ties in Canada even while they are abroad. If they qualify, factual residents may claim all relevant tax deductions that would have applied to them if they had lived in Canada year-round.
Learn more tips about filing your taxes in this article.
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