Are you pondering your 2012 TD1 Federal and Provincial? Notice the fillable form.
If you are an employee, its that time! You've heard it's better to pay less tax at source and not have as big a refund next April? This is how it's done. The TD1 federal and the TD1 provincial provide you with an opportunity to pay less tax at source during the year so you have more money to pay down debts, and even more important, to put food in the fridge.
If the deductions and credits you claim aren't on the TD1, check out whether the T1213 is right for you. It requires approval from CRA.This form might help you with that cash crunch if you are paying spousal support or have other large expenses or credits that qualify to reduce your taxes. Watch your April filing to see how many expenses or credits you have that provide for a refund, and make sure to amend again during the year if your situation changes.
Oh yes, make sure you know that any time your marital status changes, the new budget requires you to report the change in status in the next month, you no longer have 90 days to ponder your change, it's much sooner, and hopefully will cause less stress when you don't have to pay back benefits you should not have received like GST/HST credits and Child Tax Credits.
Notice the new for 2012, Family Caregiver Amount (FCA)? This extra amount of $2,000 at 15% federal equates to $300 of tax reduction. It's worth noticing, but make sure you document your claim before you decide to make a claim, or you could be paying more tax than you planned in April 2013.
The additional amount is for infirmity and you'll find it is added on a five different lines, married, wholly dependent, child, caregiver and infirm, all found on the new TD1, but only on the federal TD1, it's not a provincial credit, at least it isn't in BC. It's not the only credit that's only federal.
There is no definition of infirmity in the Income Tax Act. Infirm is not the same as disabled. Infirmity takes its common meaning from the dictionary.
It's that time! Complete your TD1 for payroll deductions at source
If your dependant is your child, spouse, parent, or other dependant and is considered infirm, it’s possible to make this claim, but only federally, and only once per person. In other words if your child is also your equivalent to spouse/wholly dependent claim, you can only claim $2,000 once, no double dipping.
It is possible to agree to share or apportion some credits including wholly dependent, caregiver, infirm over 18, disability, adoption, First Time Home Buyer, Public Transit, Children’s Fitness and Children’s Arts Credits.
Here is some guidance from the budget documents, federally and from CRA about the budget.
Note the written requirement for documentation below. I’ve clipped important passages for you to give them to the doctor to construct a letter to keep with your tax filing for 2012. You can bet that letter will be the subject of many a desk audit in the summer of 2013.
A dependant who is a minor will be considered to be infirm only if the dependant is likely to be, for a long and continuous period of indefinite duration, dependant on others for significantly more assistance in attending to the dependant’s personal needs and care when compared generally to persons of the same age. This test will apply to dependants who are under 18 years of age at the end of the year and who are claimed for purposes of the Child Tax Credit or the Eligible Dependant Credit.
If you are otherwise eligible for a non-refundable tax credit listed in Question 1 for a dependant, you may be able to claim the FCA based on the following conditions:
· For an individual age 18 or older, the individual must be dependant on you by reason of a mental or physical infirmity.
· For a child under the age of 18, the child must have a medical or physical infirmity and as a result of that infirmity is, and is likely to be for a long continued period of indefinite duration, dependant on others for significantly more assistance in attending to the child's personal needs and care when compared to children of the same age.
3. Do I have to obtain a statement from a medical doctor certifying that my infirm dependant is eligible for the Family Caregiver Amount (FCA)?
As with all the non-refundable tax credits related to infirmity, the CRA may request that you provide a signed statementfrom a medical doctor that gives the nature, commencement, and duration of the dependant's impairment.
For children under age 18, the letter should also indicate that the child, by reason of a mental or physical infirmity, is and is 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.
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