Tax gems are hard to find today and appear to be an abomination to both the federal and provincial levels of government.
With increasing frequency, they tend to be extracted like decaying teeth.
Virtually every tax reform introduced by the former Conservative government, such as the family tax cut, increases to the Tax Free Savings Account contribution limit and the child tax credits, have been systematically rolled back by the current government to previous levels.
Instead, the federal Liberal government instituted what it called the middle class tax cut, which decreases income taxes for those making between $45,282 and $90,563 a year to 20.5 percent from 22 percent. It also increased taxes on those making more than $200,000 to 33 percent from 29 percent.
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We hesitate to mention one gem that still exists for seniors and persons with disabilities for fear it will attract attention and be rolled back.
The Home Accessibility Tax Credit (HATC) stands alone as a separate credit, which may also be claimed as a medical expense as long as both criteria and conditions are present under both rules.
Double dipping at the tax trough is almost unheard of, but we hope it continues because it has ext-remely beneficial consequences to taxpayers who struggle with infirmities.
The non-refundable tax credit, which was introduced April 21, 2015, provides tax relief of 15 percent up to $10,000 (or $1,500 in tax credit) of eligible expenditures for seniors and persons with disabilities.
The following eligible individuals could also claim the credit:
- the spouse or common-law partner of a qualifying individual
- a parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece or nephew of the qualifying individual or of the qualifying spouse or common-law partner.
The credit is available for amounts paid for work performed or goods acquired after Dec. 31, 2015.
Eligible renovations or alterations must enable the senior or the person with a disability to access their home, be more mobile or functional or reduce the risk of harm in their home. The qualifying renovation cannot be temporary.
Allowable costs must be directly attributable to the qualifying renovation and can include the cost of permits and equipment rentals used for the renovation.
However, other costs, such as the cost of recurring or routine maintenance, financing costs, home entertainment devices, household appliances or expenses incurred mainly for the purpose of increasing or maintaining the value of the home, do not qualify for the credit.
In some cases, the renovation expenses may also qualify for the medical expense tax credit, and as such, you can claim both the HATC and the medical expense tax credit for these expenses.
Finding these little gems from time to time can be a cause for celebration or just plain applauding common sense.
We suggest you seek the assistance of your accounting or tax specialist to see if this little gem can work for you.
