Calculating the Tax Credit
For 2021, the credit is equal to 35% of the eligible expenses that you or your spouse paid during the year for eligible services.
For 2022, the tax credit is equal to 36% of your eligible expenses. The rate will increase by 1% each year until it reaches 40% in 2026.
Limit on eligible expenses
Senior living alone
The annual limit on eligible expenses is $19,500. Therefore, the maximum tax credit is $6,825 (35% of $19,500) and $7,020 (36% of $19,500) for 2021 and 2022, respectively.
Dependent senior living alone
The annual limit on eligible expenses is $25,500 for dependent seniors. Therefore, the maximum tax credit is $8,925 (35% of $25,500) and $9,180 (36% of $25,500) for 2021 and 2022, respectively.
If you are considered a dependent senior, you may be required to provide a written certificate from your physician. You can use form TPZ-1029.MD.A-V, Certification of Dependent Senior Status: Tax Credit for Home-Support Services for Seniors.
Couple
The limit on eligible expenses for your couple is the total of the limits that apply to you and your spouse. For example, if neither of you is considered a dependent senior, the annual limit on eligible expenses for your couple is $39,000 (2 × $19,500). The maximum tax credit for your couple is $13,650 (35% of $39,000) and $14,040 (36% of $39,000) for 2021 and 2022, respectively.
If either you or your spouse is considered a dependent senior, the annual limit on eligible expenses is $45,000 per year. The maximum tax credit for your couple is $15,750 (35% of $45,000) and $16,200 (36% of $45,000) for 2021 and 2022, respectively.
If you are both considered dependent seniors, the annual limit on eligible expenses is $51,000. The maximum tax credit for your couple is $17,850 (35% of $51,000) and $18,360 (36% of $51,000) for 2021 and 2022, respectively.
If you or your spouse is considered a dependent senior, you may be required to provide a written certificate from your physician. You can use form TPZ-1029.MD.A-V, Certification of Dependent Senior Status: Tax Credit for Home-Support Services for Seniors.
Reduction based on family income
Non-dependent senior
For 2021, if your family income is over $60,135, the tax credit is reduced by 3% of the amount by which your family income exceeds that threshold. Note that as of the 2022 taxation year, the reduction is calculated using two family income thresholds. First, the credit is reduced by 3% of the portion of the annual family income that exceeds the first threshold of $61,725 but does not exceed the second threshold of $100,000. Next, the credit is reduced by 7% of the portion of the annual family income that exceeds the $100,000 threshold.
Dependent senior
For 2021, the tax credit is not reduced if you are considered a dependent senior or, if you are claiming the tax credit jointly, your spouse is considered a dependent senior.
As of the 2022 taxation year, the tax credit is reduced if your family income exceeds a set threshold. For 2022, the tax credit is reduced by 3% of the portion of the family income that exceeds $61,725. However, for that year, the maximum reduction is equal to 1% of eligible expenses. This means that the reduction cannot be greater than 1% of your eligible expenses for the year. The maximum reduction will increase by 1% annually to reach 5% of eligible expenses in 2026.
Calculation of eligible expenses
Which services and expenses are eligible depends on the type of dwelling you live in (private seniors' residence, apartment building, condominium, house or health establishment). For more information, see Eligible Services and Expenses Based on Your Place of Residence.
Any reimbursement received to cover expenses reduces the amount of expenses eligible for the tax credit for home-support services for seniors. Likewise, any reimbursement received to cover rent reduces the amount of rent used to calculate eligible expenses.
However, financial assistance received in a form other than a reimbursement and the use of which you are not required to account for (such as an amount received under the shelter allowance program) does not reduce the amount of your eligible expenses.
| Annual family income | $65,000 |
|---|---|
| Reduction threshold | $60,135 |
| Portion of income that is over the reduction threshold | $65,000 − $60,135 = $4,865 |
| Tax credit reduction for the year | $4,865 x 3% = $145.95 |
| Eligible expenses for the year | $19,500 |
| Tax credit amount for the year | ($19,500 × 35%) − $145.95 = $6,679.05 |