Principal Issues: 1. Whether or not a parent may claim an amount for an eligible dependant, an amount for infirm dependants age 18 or over, or a disability amount transferred from a dependant, for a severely handicapped child resident in long term care. 2. Whether or not the resident may file an income tax return and claim any credits, such as the GST credit, under the Act.
Position: 1. No. 2. Yes.
Reasons: 1. The child does not live with a parent and is not supported by a parent in the parent's home. 2. Residents are eligible to claim the GSTC when they are at least 19 years of age.
XXXXXXXXXX 2006-018002 Kathryn McCarthy, CA December 21, 2006
Dear XXXXXXXXXX:
Tax Credits for Severely Handicapped Residents of XXXXXXXXXX
This is in reply to your letter dated March 29, 2006 and your facsimile dated September 15, 2006, concerning the above noted subject matter. We apologize for the delay in our response.
You indicated that your organization operates XXXXXXXXXX homes for life for severely mentally and physically handicapped residents. The Ontario Disability Support Program (ODSP) contributes $843.00 per month for their care. For residents over the age of 18, the ODSP also contributes $140.00 for diapers and $116.00 for personal treats monthly. Each resident receives a T5007, Statement of Benefits. Your annual cost is approximately $XXXXXXXXXX per resident.
The parents of residents under the age of eighteen contribute $XXXXXXXXXX monthly towards their care and also pay for the resident's prescriptions. Parents occasionally take the residents home for a weekend. You enquired as to whether or not a parent may claim an amount on Schedule 1, line 305, amount for an eligible dependant, line 306, amount for infirm dependants age 18 or over, or line 318, disability amount transferred from a dependant. In our view, a parent cannot claim an amount on line 305, 306 or 318 in respect of a child who resides in one of your homes because eligibility for the credits would depend on, among other things, whether the child lives with and is supported by the parent in the parent's home.
Further, you enquired as to whether or not a resident may file an income tax return and claim any credits, such as the GST credit (GSTC). We confirm that residents are eligible to claim the GSTC if they are at least 19 years of age.
We trust these comments are helpful.
Yours truly,
Randy Hewlett
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch