The caregiver and infirm dependant credits are similar, in that they are available to an individual on whom an infirm adult is dependent upon support. However, there are some circumstances in which they differ.
Basically, the caregiver credit can be claimed by an individual in respect of an adult relative 18 years of age or over who lives with the individual in the year and who is dependent upon the individual for support. The relative must either be physically or mentally infirm, or, in the case of the individual’s parent or grandparent, 65 years or age or older. The federal credit for 2015 is 15% of $6,701 (of $4,608 if the parent or grandparent is not infirm), but is reduced if the dependant’s income exceeds $15,735.
The infirm dependant credit similarly can be claimed by an individual in respect of an adult relative who is dependent on the individual for support by reason of physical or mental infirmity. However, there is no requirement that the relative live with the individual. Also, a parent or grandparent 65 or over can qualify only if they are infirm. The federal infirm dependent credit for 2015 is 15% of $6,701, reduced if the dependant’s income exceeds $6,720.
So the two maximum credits for infirm dependents are equal, although the caregiver credit has a higher income threshold for the dependant and is therefore potentially more valuable.
In some cases you will be eligible for only one of the credits. For example, if your dependant is your senior parent or grandparent who is not infirm, you can claim the caregiver credit but not the infirm dependent credit. On the other hand, if your infirm dependant does not live with you, you can claim the infirm dependent credit but not the caregiver credit.
But since the credits overlap somewhat, you may qualify for both. If you qualify for both credits in respect of the same dependant, you must claim the caregiver credit for that dependant. As noted, this credit is potentially higher in any event because of the different income threshold for the dependant.
However, either credit can be claimed in respect of more than one dependant in one taxation year, assuming the criteria are met for each dependant.
If you are single or separated
If you are single or separated from your spouse or common-law partner, you can claim the spousal equivalent credit (also called the wholly dependent person credit) in respect of an infirm relative who resides with you. This credit is 15% of $13,420 (but reduced if the dependent has any income), and therefore may be greater than both the caregiver and infirm dependent credit.
If you qualify for both the spousal equivalent credit and one of the above credits in respect of the same dependant, you can claim only the spousal equivalent credit. If you also qualify for the caregiver credit and it is greater (owing to the income threshold applicable to that credit), the excess can be claimed as a “top-up” credit.
You can only claim one spousal equivalent credit per year.
Potential transfer of disability credit
If you are eligible to claim one of the above-noted credits in respect of a dependant and that person qualifies for the disability tax credit, the dependant may be able to transfer some or all of that credit to you. Generally, they can transfer the unused portion of the disability credit to you, but only once their tax is otherwise down to nil. In other words, if they can use the disability credit, they must use it before transferring it to you.