If you’re a parent interested in the eligible dependant tax credit, then being aware of the rules and regulations is crucial. The reason why is quite simple. There are a number of rules involved in the eligible depend tax credit which could prevent you from eligibility. It’s also important to note that the dependant does not have to be under the age of 18.
First, you must meet all of the following conditions:
• You did not have a spouse or common-law partner or, if you did, you were not living with, supporting, or being supported by that person (i.e. you are single);
• You supported a dependant throughout the year; AND
• You lived with the dependant (in most cases in Canada) in a home that you maintained.
Please take note that you cannot claim this amount for a person who was only visiting you. In addition, at the time you met the above conditions, the dependant must also have been either:
• Your parent or grandparent by blood, marriage, common-law partnership, or adoption; or
• Your child, grandchild, brother, or sister by blood, marriage, common-law partnership, adoption and under 18 years of age or had an impairment in physical or mental functions.
The dependant must not earn more than $11,038 in net income for the year. If you claim the family caregiver amount on behalf of your dependant, the dependant must not earn more than $13,078 in the year. If you include money received through the Universal Child Care Benefit (or the “UCCB”) on your child's tax return, be sure to include this amount in his or her net income.
Exceptions to Eligibility
But there are exceptions to everything. For instance, if you are single and your child resides part time with you and part time with your former spouse, only one of you can claim the tax credit. Another example is if your mother is dependant on you but your father claims the credit, you cannot claim her as a dependant.
Subsection 118(5) of the Income Tax Act highlights the case of divorce relating to the dependant tax credit. It states that if a Judge orders one parent pay child support to the other, then the parent paying the support cannot claim the tax credit.
However, because this is tax law, there is an exception to the exception! If a Judge orders that both parents have to pay child support to the other than one of the parents is in face entitled to claim the credit.
With this in mind, if you are interested in claiming this tax credit, be sure to review and understand the above rules and requirements in order to ensure your eligibility to the program.