Beat the rush! Certify infirmity for 2012 tax return

You might want to beat the rush. Visit your doctor now to document claims for the new $2,000 family caregiver amount (FCA) as you'll be able to claim it on your 2012 tax return in April 2013. 

Here's the proposed legislation released October 2011.  You'll want to review all of the changes to the Income Tax Act S. 118, and not just for the $2,000 credit, there's other changes too.  The plain english version is found in the Budget summaries on the CRA website.

If you're a doctor, expect visitors. Not only will you be requested to complete a T2201 certifying disaiblity, but now you'll have to vet infirmity as well. Infirmity doesn't have the same definition as disability. Infirmity isn't defined, it takes it's common ordinary meaning from the dictionary.

If doctor's charge a reasonable amount for the certification, the amount can be recorded as a medical expense, so expectt to provide a receipt for the charge, and include it in income, (of course). There are over 150 medical expenses, most of which now require certification in writing in order to be claimed by your patients.  Only four of these expenses require the disability tax credit, most are common ordinary expenses claimed by ordinary people, who may have an infirmity, either mental or physical, and doctors may now be called upon to certify this infirmity. 

Oh yes, as as of 2010, if it was for cosmetic reasons, they can't write it off, so doctors and dentists may be required to provide additional proof that procedures were not for cosmetic purposes.

There are five possible bumps for dependants you support. What's it worth? $2,000 x 15% federal tax rate is $300 per person, then multiply $300 x the number of dependants who are 'infirm'.

Best to review your 2010 tax return now to see if you'll benefit. What do you have to do? Get your doctor to agree that dependants you support and claim on on your federal tax Schedule 1 are infirm:

1. Line 303: Spouse
2. Line 305: Eligible dependant
3. Line 367: Child under 18 at end of year
4. Line 306: Infirm dependant age 18 or older
5. Line 315: Caregiver amount

And, once you qualify, you may want to adjust your tax at source by completing a new TD1 federal and provincial/territorial to provide payroll with proof you don't need as much tax taken at source.

CRA explains in their explanation of the Budget 2011, that it will likely be necessary to obtain a signed statement from a medical doctor that provides the:

• Nature of the infirmity
• Commencement of the infirmity
• Duration of the dependant's impairment

"For children under 18, indicate that the child, by reason of mental or physical infirmity, is and likely to be, for a long-continued period of indefinite duration, dependant on others for significantly more assistance in attending to his or her personal needs and care when compared to children of the same age"

Now, if your doctor doesn't want to use that wording, it's going to be tougher to get the credit. If you are a doctor and feel offended by the wording, your clients aren't going to be very happy if you refuse to provide them with the necessary documentation.

If you're claiming for an infirm child and you are also eligible to claim for the same child as an eligible dependant, there's no double dipping on the $2,000, you'll only get one claim for $2,000 for each child.