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Caregiver Tax Canada

Caregiver Tax Canada

In Canada, it is a legal requirement to file specific tax when employing a caregiver. The caregiver is also required to pay and file taxes. However, below we will outline how a caregiver is also given various tax advantages and tax credits. For tax purposes, a caregiver can literally be defined as anyone that provides care to a person, animal or home for a fee. Generally the caregiver definition applies to a nanny more than anyone else but there are many others that qualify for the definition in Canada for tax purposes.

Caregiver Tax and Benefits

Any resident of Canada who employs a caregiver must file and pay the required taxes. The caregiver must also file a tax return. However, a caregiver is also entitled to specific tax benefits as outlined by Service Canada (http://www.servicecanada.gc.ca/eng/lifeevents/caregiver.shtml). The caregiver tax rules state that one can claim the caregiver amount tax credit when you lived with a dependant who was one of the following:

  1. Your or your spouse or common-law partner’s child or grandchild; or
  2. Your or your spouse or common-law partner’s brother, sister, niece, nephew, aunt, uncle, parent, or grandparent who resided in Canada
  3. Other criteria may apply

A person defined as a “caregiver” in Canada has the following advantages and options:

  1. Apply for Employment Insurance Compassionate Care Benefits
  2. Claim the Caregiver Amount on your Tax Return
  3. Apply for Employment Insurance Compassionate Care Benefits
  4. Take Care of Yourself While Taking Care of Others
  5. Explore Live-in Caregiver Options

How Tax4Nanny Addresses the Canada Caregiver Tax

Tax4Nanny covers the caregiver tax filing process from beginning to end. We prepare and file the employer’s taxes and we prepare and file the caregiver’s taxes. Our objective is to provide a full service throughout the tax filing process.