Hi guys,

Last year my parents become landed immigrant. I have few questions for filing their tax return to maximize the refund.

They have zero income in Canada. My dad has pension income in India. (approx. CAD 8000 for 2013)

1) My mom take care of my kids in Canada. So, I have plan to show some income for my mom (approx. $7000. I know the CRA limit)

2) Do you think it is worth to show my dad's pension income in his return? CRA ask for any documentation? Is it headache? Showing this income may not make difference in his refund but do you think it can create problem somewhere else in future? What most of you guys do?

3) They stay with me. So no rent or other expenses. Some medicine expenses only.

4) What need to be done to get GST/HST credit?

5) What else we suppose to do for maximizing refund?

Thanks,

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Success is Never Ending and Failure is Never Final.

Hello meitsme,

As a resident of Canada, your father must report income he earned from anywhere in the world, which includes the pension from India. Since it's $8,000, he won't pay any federal or provincial tax on it, and there will be nothing to lose by reporting it. The CRA usually scrutinizes deductions/credits one claims, and not sources of income.

They can each apply for the GST/HST credit simply by filing a tax return.

You can claim the caregiver tax credit amount on your tax return. This is a non-refundable tax credit that will reduce your tax payable figure. The caregiver amount is given to those people who take care of dependants, like parents, grandparents, etc. You can read more about the credit by following the link below:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/315/menu-eng.html

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Thanks Amadan123.

Looking for some more detail. Help from tax experts will be appreciated.

My dad born in 1947 and mom born in 1949 both has 0 income. They are on PR with me since May 2013.

I followed the link you provided and it seems my dad is eligible as dependent but not mom because she born in 1949. (CRA site says 1948 or earlier). is this correct or Am I misunderstanding?

Doe it mean that I can claim dependent amount ( line 305 ) of $13078 for my dad? [ 11038 (Base amount) + 2040 (family caregiver amount) = 13078 ]

If I claim my dad as dependent with 0 income, I don't think so that I can claim any caregiver amount for him because $13078 is greater than $6,530 (Maximum caregiver amount). Am I right?

My wife has lower income than me. Can I claim dependent amount in my tax return to save more tax?


if my mom is not eligible as dependent then I would prefer to show some income on her return for taking care of my kids. So, I can claim as day care expense. I know that this need to claim on my wife's return as she has lower income.

Looking for best way to claim dependent and caregiver amount for my mom and dad as well as should I show some income on my mom's return for taking care of my kids or not?

All your response will be appreciated.

Here is the link for schedule 5 http://www.cra-arc.gc.ca/E/pbg/tf/5000-s5/5000-s5-13e.pdf

Thanks in advance.

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Success is Never Ending and Failure is Never Final.

Quote:

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Originally posted by meitsme

Thanks Amadan123.

Looking for some more detail. Help from tax experts will be appreciated.

My dad born in 1947 and mom born in 1949 both has 0 income. They are on PR with me since May 2013.

I followed the link you provided and it seems my dad is eligible as dependent but not mom because she born in 1949. (CRA site says 1948 or earlier). is this correct or Am I misunderstanding?

Doe it mean that I can claim dependent amount ( line 305 ) of $13078 for my dad? [ 11038 (Base amount) + 2040 (family caregiver amount) = 13078 ]

If I claim my dad as dependent with 0 income, I don't think so that I can claim any caregiver amount for him because $13078 is greater than $6,530 (Maximum caregiver amount). Am I right?

My wife has lower income than me. Can I claim dependent amount in my tax return to save more tax?


if my mom is not eligible as dependent then I would prefer to show some income on her return for taking care of my kids. So, I can claim as day care expense. I know that this need to claim on my wife's return as she has lower income.

Looking for best way to claim dependent and caregiver amount for my mom and dad as well as should I show some income on my mom's return for taking care of my kids or not?

All your response will be appreciated.

Here is the link for schedule 5 http://www.cra-arc.gc.ca/E/pbg/tf/5000-s5/5000-s5-13e.pdf

Thanks in advance.

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Hello Meitsme,

You can only claim family caregiver amount if the dependant is mentally and/or physically impaired.

The caregiver amount has a maximum value of 4,490 as well. The calculation for the caregiver amount is as follows:

Lesser of:
Base amount of $19,824 minus dependant's income, or
$4,490

With regards to your spouse, you can claim the spousal amount of $11,038, which is reduced by your spouse's income.

I know that FH directed us to an publication that stated restrictions as to who can and cannot be paid for child care services.

Just to summarize, you can:
- claim caregiver amount for your father
- not claim caregiver for your mother
- not claim eligible dependant
- claim spouse amount for your wife
- claim child amount for your child(ren)

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Madan Chartered Accountant team
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Thanks Amadan123.

I understood that I can take an advantage of caregiver amount (for my dad) and child care expense only (It will be income for my mom).

Do you think anything else I can claim for my mom and dad?


For my mom and dad returns, they will have very low income. They haven't work here and not paid tax. So, they will have $0 refund. I think they will be eligible for GST/HST refund.

Any advice for my mod and dad returns? Anything they should claim or report to take benefit of low income?

Thanks in Advance.

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Success is Never Ending and Failure is Never Final.

Hello metisme,

You could consider income-splitting strategies with your parents. This involves lending them the funds to make investments. The income they earn on those investments will be taxed in their lower rate of income, as opposed to your's.

Please see article http://www.bdo.ca/en/Library/Services/Tax/Documents/Tax-Bulletins/Income-Splitting.pdf

You should speak to a tax specialist to find out how this can work for you.

I hope that helps.

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Madan Chartered Accountant team
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