Can the unused portion of the disability tax credit of a 20-year-old child placed in an institution with a severe disability be transferred to his or her parents who are only responsible for his or her clothing? In indicating, probably “yes,” CRA stated:
Although this is usually the case, the dependant does not have to live in the same dwelling as the individual in order for the individual to apply for that credit. Thus, in your scenario, we are of the view that the transfer of the wholly dependent person credit could be made to the father and mother since they meet some of their child's essential needs. However, the total claimed under subsection 118.3(2) by these two parents cannot exceed the maximum amount that only one of the parents would be entitled to deduct under subsection 118.3(2), if that individual were the only one entitled to the tax credit for that year.