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Email this12:59 pm
August 23, 2017
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My wife paid the rent for my mother-in-law's long term care, how can I claim this rental payment?
Thanks!
1:48 pm
October 27, 2013
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AFAIK, she cannot. MIL could claim the portion of her LTC that is 'eligible' either under medical expenses where certain things can be deducted or via the DTC if MIL has an approved disability claim. The LTC home is obligated to provide a breakdown of what portion of her monthly expenses are eligible.
4:10 pm
October 21, 2013
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Your wife can't claim anything as far as I know. It would only be your MIL who could claim. And most or all of it will be tax credits, which means she has to have a tax bill to claim it against. Since your wife is paying her bills, I assume she doesn't have this.
There is a property tax provision that can be claimed. It may depend on the province (not sure) and the income , and it matters whether the LTC is private or pubic ownership - the home must provide this info.
There is some kind of caregiver provision that your wife might be able to claim but i think it doesn't apply if the person is in LTC. You would have to check.
MIL should be able to get the Disability Tax Credit, as AltaRed suggested, but only applies to her and needs form filled out by doctor, can be retroactive I think (I know it used to be possible). Most people living in LTC would qualify.
There may be something that is specific to your province of which I m not aware.
7:00 pm
January 26, 2018
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Loonie said
...Disability Tax Credit, as AltaRed suggested, but only applies to her and needs form filled out by doctor, can be retroactive I think (I know it used to be possible). ...
Yes, the Disability Tax Credit can be applied retroactively. I just went through this for my mother. The Disability Tax Credit application can be submitted any time. There is a box to check if you want the CRA to retroactively apply the DTC to prior income tax years, up to 10.
7:18 pm
October 27, 2013
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Loonie said
There is some kind of caregiver provision that your wife might be able to claim but i think it doesn't apply if the person is in LTC. You would have to check.
It is called the Canada Caregiver Credit and I doubt it applies to someone in LTC where the LTC provides the necessities of life.
9:18 am
February 27, 2018
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Norman1, this thread is in your wheelhouse.
Thanks.
11:22 am
April 6, 2013
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The answer or answers depend on what the OP's wife is actually paying for.
A monthly long term care billing is more than just for rent. One friend showed me a bill that showed billing for room rental, meals, pharmacy charges, and other items.
One isn't going to be able to deduct or claim for paying for the meal plan or the shuttle rides part of the monthly billings.
Some provinces have tax credits for property taxes or rent paid. However, one that I looked at only allows the person the rent is for to claim the tax credits and not someone else who may be paying the rent.
1:03 pm
September 11, 2013
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Long term care facility costs are usually 100% deductible by person in them. CRA info says:
"All regular fees paid for full-time care in a nursing home or for specialized care or training in an institution are eligible as medical expenses, including fees for all of the following:
food
accommodation
nursing care
administration fees
maintenance fees
social programming and activities fees
However, extra personal expenses (such as hairdresser fees) are not eligible."
1:41 pm
April 6, 2013
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That's not the case because not all long term care places are nursing homes. Some are retirement homes.
Just before that text you quoted from CRA document Attendant care and care in a facility, there is a significant note:
Full-time care or specialized care
…
Note Generally, you cannot claim the entire amount you paid for a retirement home or a home for seniors. However, you can claim salaries and wages for care in such facilities if the care recipient qualifies for the disability tax credit (see Salaries and wages). What is a nursing home? – A nursing home is generally considered to be a facility …
All regular fees paid for full-time care in a nursing home or for specialized care or training in an institution are eligible as medical expenses, including fees for all of the following:
…
3:54 pm
September 11, 2013
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Here's what's normally meant by long term care: "Long-term care homes care for people with significant health challenges and cognitive impairment who need 24-hour access to nursing care and supervision. While homes are publicly funded by the government to provide primary health care and nursing care, support with the activities of daily living, a variety of therapies and activities, and special diets residents also pay a fee for their accommodation. Long-term care homes are also known as Homes for the Aged or Nursing Homes."
Retirement or assisted-living homes are not included in "long term care", for those you do carve out certain costs for tax claiming purposes.
4:58 pm
October 21, 2013
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Bill said
Long term care facility costs are usually 100% deductible by person in them. CRA info says:
"All regular fees paid for full-time care in a nursing home or for specialized care or training in an institution are eligible as medical expenses, including fees for all of the following:
food
accommodation
nursing care
administration fees
maintenance fees
social programming and activities fees
However, extra personal expenses (such as hairdresser fees) are not eligible."
Subsequent comments in this thread aside, these costs are not deductible. To the extent they are eligible, they are only medical expenses, thus tax credits, which mean you have to have a tax bill to claim them against, which means you have to have enough income to generate the tax. If someone else is paying your bills, you probably don't have that income.
5:51 pm
September 11, 2013
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Yes, deductible is the wrong term, it's a medical expense of the long-term care resident.
In Ontario those with low income can apply for subsidy for basic room (shared with maybe 3 others) in long-term care. I assume other provinces have similar programs so no-one is denied entry.
Of course no such subsidy exists for (private sector run) retirement homes, though I suspect you might be able to negotiate with some depending on availability.
7:57 am
April 6, 2013
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Bill said
Here's what's normally meant by long term care: "Long-term care homes care for people with significant health challenges and cognitive impairment who need 24-hour access to nursing care and supervision. …Retirement or assisted-living homes are not included in "long term care", for those you do carve out certain costs for tax claiming purposes.
Many people do not use that definition and use the terms retirement homes and nursing homes interchangeably.
Retirement homes also provide long term care. I visited one that had special floors for the dementia residents. "Aging in place" is the marketing term they use. If one didn't think carefully, one could easily think the whole place was a nursing home.
The OP needs to determine precisely what his wife is paying for for his mother-in-law. Is it some part of the bill for a nursing home or part of the bill for a retirement home? After that, what part is it?
Apparently, the food part of a nursing home can be claimed. But, the food part of a retirement home is not and only the food prep part is!
9:50 am
October 27, 2013
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I agree with Norman. My mother was in a 'for profit' independent living facility that also provided other enhanced living services such as med assistance, but not full out LTC/nursing home care. She was able to claim 'eligible expenses' that the retirement home had broken out in her monthly statement because she was legally blind and had an approved Disability certificate to claim the DTC.
Had she been in LTC, she could have claimed, I believe, all LTC expenses as a tax credit up to the limits of the medical expense, but none of it could have been claimable by anyone else.
These things are relatively confusing because of the different categories and definitions of dependency, medical expense, DTC, CCC, etc. The OP needs to spend a good deal of time going through this, but it clearly is not as simple, or as all encompassing, as 'how can my wife claim the rent of her mother's LTC'. The OP will be disappointed on what actually can be claimed as a tax credit by either his wife or his MIL.
10:37 am
September 11, 2013
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I get that some people don't use the correct definition, that they use terms interchangeably, that OP may have meant retirement home when he indicated long term care, I'm just clarifying for those who care to know as it helps to minimize confusion, i.e. "long term care facility" excludes retirement homes. Here's another example from ontario.ca re "Long Term Care Overview" which makes it clear in the last sentence:
"About long-term care homes
Long-term care homes are places where adults can live and receive:
help with most or all daily activities
access to 24-hour nursing and personal care
You can expect much more nursing and personal care here than you would typically receive in a retirement home or supportive housing."
And there are many facilities containing both, for example you might be in the retirement home assisted living wing and then move into the long term care wing as things deteriorate. In the former you need to more carve out the allowable medical expense portion because the premise is you're not there mainly for the care, it's a place to live with some help, whereas in the latter the premise is you're mainly there for the care. Here's a link that provides a guide for what can be claimed re each of the two categories of facilities:
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/lines-33099-33199-eligible-medical-expenses-you-claim-on-your-tax-return/attendant-care-care-a-facility.html
Note the CRA info also indicates the distinction, "Generally, you can claim the entire amount you paid for care at any of the following facilities:
nursing homes (full-time care)...........Generally, you cannot claim the entire amount you paid for a retirement home or a home for seniors......."
Finally, here's another link for those who are interested in the various distinctions between long term care and retirement homes, there are various other similar resources if you google. Note the 4 categories of retirement homes, ranging from independent supported living to assisted living to specialized (e.g. mild dementia) care, it is up to each retirement home what it chooses to offer.
https://www.closingthegap.ca/long-term-care-homes-vs-retirement-homes-vs-home-care-in-ontario/
5:54 pm
October 21, 2013
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One has to laugh at the notion that any of these facilities provides "full time" care. The last year has made it very clear that they do not and were not set up to do so. They do, however, have full time residents, some of whom have felt more like prisoners.
3:37 am
October 11, 2015
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I just moved my mom into a private nursing home--she is on the assisted living floor and she has dementia and limited mobility, using a walker or wheelchair to get to the dining area. I don't know how much will qualify for tax credits (she was considered "disabled" already, according to CRA). I have a million questions, but I guess my major question now: 1. if she keeps her condo and rents it out, is the nursing home her primary residence, or is her condo her primary residence? (this is in case we want to rent it out, since the market is bad right now). 2. If she sells the condo (it's worth about $500-$600), and we get GICs, how do we avoid paying tax on the GICs? How much will the disability tax credit/medical expenses from the nursing home offset the interest? (ie. 5% gicX $500K=$25,000 interest--which she needs for the nursing home! (which is over $8K per month). Thank you so much!
6:08 am
September 11, 2013
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My understanding is when you move out of a property and begin using it as a rental property it is then no longer your residence, it is not being used for your own personal residence at that point. So I guess the nursing home becomes her residence, like an apartment.
I don't know how you can avoid taxes on the gic interest, it's income and unless in a registered plan is subject to income tax.
My understanding is nursing homes will usually break out the medical care portion of the total bill that you can claim as medical expenses on the tax return. The other portion is considered rent for the unit, treated just like regular residential rent one would pay, no tax deduction. You can ask the nursing home what % of the monthly bill is allocated to each, based on their historical breakdown, to get an idea.
To get a better idea of her cashflow situation it might be an idea to go to CRA site and do rough T1 tax and the related provincial returns using approximate numbers to see the approximate income tax effect of mom's situation. There are a number of federal and provincial credits (e.g. disability amount, medical expenses), benefits and other provisions (e.g. OAS clawback) for folks in your mom's situation that can vary greatly based on her income level.
7:01 am
October 27, 2013
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I agree with Bill the facility will (supposed to) break out what is covered as a disability/medical tax credit on a tax return. They could probably give you an idea of what they did (approximately) for the past 2023 tax year so that you can do some 'what if' tax planning.
I also agree with Bill the condo becomes an investment property once it is rented out. You will need an 'appraisal' done to determine FMV for eventual cap gains/loss tax purposes when it is eventually sold. My view however is renting may be an ill conceived idea since you really do not know which way housing prices are going on a forward basis and your Mom's longevity is not known. Often some certainty now is better than a forward gamble.
You can run various tax scenarios with tax software on 'what ifs' with respect to various impacts 'projected income' from either rent or GIC interest affects the tax return. Either way, it will be taxable income.
12:02 pm
March 14, 2023
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dentgal said
How much will the disability tax credit/medical expenses from the nursing home offset the interest?
My experience with private nursing home expense splits is that about 25% of the cost was "eligible" as medical expenses. It wasn't relevant as Mom required full time care and was able to claim the full amount paid. The home was in a smaller city so the cost split could be completely different for a facility in a large city, which I'm guessing is the case given the $8k per month cost. As others have mentioned, the home should be able to give you a rough idea of their split.
As I recall, the disability tax credit is a fixed amount and the cost of care has no impact on it.
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