Legalese_05-11

Jeff Green | Mar 17, 2005

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Twelve tax tips for your 2005 return Part II

byHeidi Lazar-Meyn, Lawyer, and HarryBeatty, Barrister and solicitor

7. You can take the full METC for yourself and your spouse or common-law partner, and your or your spouse’s or common-law partner’s dependent children who were born in 1988 or later. For adult dependent children and other related dependants, you can claim a percentage of their medical expenses which you or your spouse or common-law partner paid to a maximum of $10,000, under the proposed changes to the ITA[S1]. This claim is adjusted based on the dependant’s net income for the year.

The medical expenses that you can claim are those that you, your spouse or your common-law partner paid for and have not been reimbursed for. Examples of expenses that you can claim include amounts paid to adapt a vehicle used to transport a person who uses a wheelchair, premiums for private health insurance, the additional cost associated with the purchase of gluten-free products as prescribed by a physician or payments for someone to learn to care for a dependent relative with a disability in their household.

In addition to the medical expenses listed in Tax Tip #6 for which you could claim either the METC or DSD, under the proposed changes to the ITA, there would be several new medical expenses for which you could claim the METC:

You can claim all of your eligible medical expenses, even if you paid them outside of Canada . Also, you can claim medical expenses for any 12-month period that ends in 2005, so if you had medical expenses that you did not claim on your 2004 return, it may not be too late. If you, or a family member, had high medical expenses incurred towards the end of 2005, it may be advisable for you to wait until the 2006 taxation year before claiming them. Consult your tax advisor.

You may also be eligible to claim the Refundable Medical Expense Supplement. To be eligible for it you must have claimed the METC or the DSD, and have a net family income of less than $36,663. Additionally, you must have reported at least $2,857 in net income from work on your 2005 return.

8. The Amount for Infirm Dependants Age 18 or Over is a credit for your, or your spouse or common law partner's, relative if they were "mentally or physically infirm", were born in 1987 or earlier, and were dependent on you for support. You cannot claim this amount if the relative had net income of more than $9,308 in 2005.

9. If an adult dependent relative lives with you, you may be able to claim a caregiver amount. The relative must have a mental or physical impairment, unless he or she is at least 65, and is your parent or grandparent, or the parent or grandparent of your spouse or common-law partner. You cannot claim the caregiver amount if the relative had net income of more than $16,989 in 2005.

10. If you were enrolled in a qualifying educational program in 2005 you can claim the amounts that you paid for tuition and an education amount for each month of study. If you attended part-time and can claim the DTC, or a medical practitioner certifies on Form T2202 that you could not be expected to attend full-time because of a "mental or physical impairment", you can claim the full-time education amount of $400 per month instead of the part-time amount of $120 per month.

11. Don't forget to take any provincial or territorial tax credits or deductions to which you are entitled. Page 5 of CRA's pamphlet "Information Concerning People with Disabilities", mentioned in Tax Tip #3, lists 10 of these.

Ontario residents should carefully check the instructions, “Completing Your Ontario Forms”, which are available at:

http://www.cra-arc.gc.ca/E/pub/tg/5006-n/README.html

Ontario has different income cutoffs and maximum amounts for some deductions and credits. Often these are higher than the federal amount.

12. You still can make changes to your income tax returns for 1996 and later years. Make sure to change any income tax returns as soon as possible to take advantage of credits or deductions that you missed when you filed.

You can ask for the change safely over the Internet. You also can find out other information about your tax return over the Internet, or authorize another person to do these things for you.

Before you can check your tax information on line, you need to get a special Government of Canada password, called “epass”. Information on how to get an epass, and what it will allow you to do, is at:

http://www.cra-arc.gc.ca/eservices/tax/individuals/myaccount

More information can be found in the article “Disability-Related Income Tax Provisions”. The authors have updated this article for tax year 2005. It will be posted shortly at: www.archdisabilitylaw.ca

For specific information concerning your own tax return, you should contact CRA or your tax advisor.

Legalese is a column of general information and opinion on legal topics by the lawyers of Rural Legal Services, Box 359 , Sharbot Lake , ON , K0H2P0, 613-279-3252, or 1-888-777-8916. This column is not intended to provide legal advice. You should contact a lawyer to determine your legal rights and obligations.