Once again this year, the Canada Revenue Agency has announced a few changes that may affect the Income Taxes of people with disabilities and their families. They are:
- Service Animal Expenses: The Medical Expense Tax Credit has been expanded to allow expenses related to service animals that are trained to perform specific tasks for a person with a severe mental or psychiatric impairment that helps the person cope with the impairment. Costs including the cost of the animal, the care and maintenance of the animal, food and veterinary care, etc. may be claimed.
- Climate Action Incentive: Although not specifically an issue exclusively for the special needs community, residents of Ontario, Saskatchewan, Manitoba, and New Brunswick may be able to make a claim based on the size and composition of your family.
- Age 17 Tax Returns: While not new, it is important to remember to file income tax returns for people receiving RDSP Grants and Bonds. The income amount switches from the parents’ income to the person with the disability’s income at the beginning of the year that he or she turns age 19. The income amount used for these calculations is the amount reported to CRA 2 years prior to the current year. Therefore it is important that we submit an Income Tax Return for the year in which the person turns age 17 and every year thereafter, even if he or she has earned no income in those years.
- Sale of Your Principal Residence: Again, while this is not exclusive to the Special Needs Community, if you sold your home during 2018, you need to be sure to designate on your return that it was your principal residence. Otherwise, it may be subject to Capital Gains Tax.