11/16/2020
By Rob Cosman, Partner, Jones & Cosman Chartered Professional Accountants
As of the 2013 tax year, Revenu Québec has implemented a gradual increase in the tax credit for home support services for seniors. The credit first increased in 2013 and continues to increase every tax year. Here’s what you need to know about this credit and how it may benefit you:
Who Qualifies for the Home-Support Services Tax Credit?
To be eligible for this tax credit, you must be a resident of Québec and be 70 or older by the last day of the tax year for which you are filing. If you turned 70 in the middle of the year, you may only claim this credit for the months after your birthday. To claim a higher credit, you have to be a dependent senior and require to have a written certificate from your physician confirming that you are. You must also have expenses for eligible home-support services.
Which Expenses Are Eligible?
Eligible home-support services include personal care services, meals, nursing services, housekeeping, grounds maintenance, laundries, and civic support services such as help voting or budgeting. These services may be part of your rent or billed on their own, but in either case, the services must be provided by a business or an individual who invoices you. You cannot claim this credit based on home-support services you receive from your spouse or one of your dependents. The type of dwelling you live in can also affect the eligibility of these expenses.
How Does Your Dwelling Affect Your Home-Support Services Credit?
Revenu Québec has detailed guidelines on how the dwelling where you live affects this credit. In most cases, as indicated above, you can claim all of the relevant expenses that are not included in your rent. If you live in a private seniors’ residence, your rent typically includes laundry, housekeeping, meals, nursing care, and some personal care services. As a result, you can include that portion of your rent when claiming this credit.
In addition, if you rent an apartment, home, or condo, a portion of your rent is likely devoted to the upkeep and landscaping of the facility. In these cases, you are allowed to include 5 percent of your rent as an eligible expense. However, you may not claim more than $30 per month.
For more information about the eligible expenses or dwelling for the home-support tax credit, visit the Revenue Quebec link.
How Do You Calculate the Tax Credit for Home-Support Services?
To calculate this credit, add up all of your eligible expenses and multiply the result by 35 percent. This figure is the most significant change to the senior home-support services credit as of today since it had increased from 33 percent in 2015 to 35 percent.
However, besides the basic numbers, Revenu Québec has several income limits and exceptions for this credit. You must take them into account before calculating your credit.
What Are the Income Limits for the Home-Support Services Credit?
If you are a single senior, the maximum amount of expenses you can claim is $19,500, but if you are a dependent single senior, you may claim up to $25,000.
Senior couples may claim up to $39,000 of eligible expenses. As long as you both meet the age requirements, you can include both of your expenses, but only one of you may claim the credit. If one of you is a dependent senior, the expense cap increases to $45,000, and if both are dependent, it increases to $51,000.
As of 2019, if your family income is over $58,380, your credit may be decreased. Revenu Québec reduces your credit by 3 percent of the amount your income exceeds that amount.
How Does the Senior Home-Support Services Credit Work?
You multiply the eligible expenses, depending on your income and marital status, by 35 percent. For example;
If you are single with $20,000 in eligible expenses, you can only report $19,500 in expenses. To calculate your credit, multiple $19,500 by 35 percent. This yields a credit of $6,825. In most cases, you can simply claim that credit on your return.
Now, however, imagine that your income is $60,000. This amount is over the threshold, meaning your credit must be reduced slightly. To calculate the reduction, subtract $58,380 from your income, leaving you with $1,620. Then, multiply that difference by 3 percent, and the result is $48.60. Subtract this amount from your credit, and your final credit is $6,825 – $48.60 = $6,776.40.
How Do You Claim the Credit for Home-Support Services?
To claim the credit for home-support services, fill out Schedule J and transfer the credit to line 458 of your Quebec return TP-1. Alternatively, you may sign up for advance payments using Revenu Québec’s online service. If you receive advance payments, you receive reimbursements for services included in your rent on a monthly basis, and you receive credits for new expenses bills within 30 days of submitting the claim.
