Tax Tip Thursday

Today we are going to talk about some credits available to seniors from Ontario! They are part of your personal income tax return, so nothing extra to file, but you need to make sure that you gather up all the information and provide it to your tax preparer.

Seniors’ Home Safety Tax Credit

This is a REFUNDABLE tax credit! This is similar to the home accessibility tax credit and can even overlap, but is only up to $10k in eligible expenses and is totally refundable.

Who is Eligible?

You are eligible to claim the credit if you:

• are 65 or older by the end of the year, or
• live with a senior relative, or
• will live with a senior relative within 24 months after the end of the year.

What is an Eligible Expense?

Eligible expenses are expenditures for improvements to an existing principal residence or the construction of a new one, or to the land on which the principal residence is situated that:

• allow a senior to gain access to the home or the land or to be more mobile or functional within the home or on the land
• reduce the risk of harm to a senior within the home or on the land or in gaining access to the home or the land
• would normally be done by or for a person who has an impairment to allow him or her to be mobile or functional within the home or on the land

The improvements must also be of an enduring nature and be integral to the home or land, or must be a modular or removable version of an item of a type that can otherwise be installed as enduring and integral to the home or land. Renovation expenses are eligible if they improve safety and accessibility or help a senior be more functional or mobile at home, for example:

• grab bars and related reinforcements around the toilet, tub and shower
• wheelchair ramps, stair/wheelchair lifts and elevators
• certain renovations to permit first floor occupancy or a secondary suite for a senior
• handrails in corridors
• walk-in bathtubs
• wheel-in showers
• comfort height toilets
• widening passage doors
• lowering existing counters/cupboards
• installing adjustable counters/cupboards
• light switches and electrical outlets placed in accessible locations
• door locks that are easy to operate
• lever handles on doors and taps, instead of knobs
• pull-out shelves under counters to enable work from a seated position
• non-slip flooring
• a hand-held shower on an adjustable rod or high-low mounting brackets
• additional light fixtures throughout the home and exterior entrances
• swing clear hinges on doors to widen doorways
• creation of knee space under the basin to enable use from a seated position (and insulation of any hot-water pipes)
• relocation of tap to front or side for easier access
• hands-free taps
• motion-activated lighting
• touch-and-release drawers and cupboards
• automatic garage door openers

Expenses must be paid or payable in 2021 and 2022.

Ontario Seniors Care at Home Tax Credit

This is also refundable! The credit provides up to 25% of claimable medical expenses up to $6,000.

Who is Eligible?

You are eligible to claim the credit if you:

• turned 70 years of age or older in the year, or have a spouse or common‐law partner who turned 70 years of age or older in the year; and
• are resident in Ontario at the end of the tax year.
• The credit amount would be reduced by 5% of family net income over $35,000 and be fully phased out at $65,000

What is an Eligible Expense?

Eligible medical expenses are the same as those claimed for the Ontario Medical Expense Tax Credit, which can include:

• attendant care (certification required)
• care of a provincially authorized medical practitioner (e.g., nurse, occupational therapist)
• dental, vision and hearing care (for example, glasses, dentures, hearing aids)
• walking aids (for example, walkers, canes)
• wheelchairs and electric scooters
• bathroom aids (for example, grab bars, grips, rails)
• hospital beds
• oxygen and assisted breathing devices
• renovation or construction that improves a person’s mobility, access or functioning within the home because of severe and prolonged impairment

Multigenerational Home Renovation Tax Credit

Jan. 1 also marks the beginning of this new credit, which is equal to 15 per cent of eligible expenses (up to $50,000) incurred for a qualifying renovation that creates a secondary dwelling to permit an eligible person (such as a senior or a person with a disability) to live with a relative.

Today, multi-generational living is becoming more common. Whether this stems from convenient living arrangements that began during the pandemic, or it is due to the rising cost of living and the uncertain housing market, many Canadians are modifying their homes to accommodate more family members by building secondary units (like a basement apartment). And now, in an attempt to make housing more affordable, the federal government is offering a new tax credit to help make the construction costs a bit easier.

What is the Multigenerational Home Renovation Tax Credit?

This one-time tax credit provides a 15% tax refund on home expenses up to $50,000 to accommodate a family member, to a maximum of $7,500.

When does it come into effect?

The tax credit took effect on January 1, 2023, so you could be eligible for this tax benefit on your 2023 tax return.

What qualifications need to be met to receive the credit?

There are a few stipulations that need to be met in order to qualify for the credit:

• The occupant of the renovation. Not just anyone qualifies as an occupant for this tax credit—the renovation must be for a related adult who is 65 years or older, or for a family member living with a disability. This could include a grandparent, parent, child, grandchild, sibling, aunt, uncle, niece or nephew.
• The type of renovation. The renovation must be for a secondary suite, and it needs to have certain features, including a separate entrance, sleeping area, bathroom, and kitchen.
• The move-in time frame. The secondary suite must be inhabited within 12 months of completion.
• Not all expenses are eligible. Some expenses, such as housekeeping or the cost of appliances, aren’t eligible towards the total amount for the credit.

All these credits… How do I claim them?

There’s a lot of different things you can claim on your taxes in any given year. But how do you make sure you’ve got it right? Well, you can use resources like this blog post and the official rules on the CRA website, or you can hire a professional. At The Mad Accountant, we will make sure that you save every penny possible on your taxes and do it right the first time. Book your appointment today to save money on your taxes!

Disclaimer:

This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal or tax advice nor can it or should it be relied upon. All tax situations are specific to each individual. If you have specific tax questions you should book an appointment for a 1 on 1 consultation.