2017-0721711E5 Eligibility: caregiver amount for infirm child

Principal Issues: Whether shared custody parents can agree to share the Canada caregiver credit for an infirm child under 18 years of age and the eligible dependant credit (EDC) in respect of the same child for the same tax year.

Position: No; the EDC and the Canada caregiver credit for an infirm child under 18 years of age must be claimed by the same parent in respect of the same child.

Reasons: As a result of the general limitation in paragraph 118(4)(b) of the Act, only one parent will ever meet the conditions stated in clause 118(1)(b.1)(ii)(A) of the Act.

Author: El-Kadi, Randa
Section: 118(1)(b.1)(ii); 118(4)(b); 118(4)(b.1). Section 15 of the Interpretation Act.

XXXXXXXXXX                                                                                                 2017-072171
                                                                                                                         Randa El-Kadi
July 26, 2018

Re:  Canada caregiver amount for infirm children under 18 years of age

Dear XXXXXXXXXX,

We are replying to your correspondence of August 23, 2017, and our subsequent telephone conversations on September 19 and 28, 2017 (El-Kadi/XXXXXXXXXX), regarding the application of the provisions for the Canada caregiver credit for an infirm child under 18 years of age (CCC) (formerly the family caregiver credit for an infirm child under 18 years of age) and the eligible dependant credit (EDC).  More specifically, you enquired whether in a shared custody situation, parents can agree that one parent can claim the CCC and the other parent can claim the EDC in respect of the same child for the same tax year.  We apologize for the delay of our written response.

Our comments:

This technical interpretation provides general comments about the provisions of the Income Tax Act (the Act) and related legislation (where referenced). It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R7, Advance Income Tax Rulings and Technical Interpretations.

Generally, paragraph 118(1)(b.1) of the Act allows a parent of a child under the age of 18 years with mental or physical infirmity to claim the CCC for each such child if, among other things:

(i)   the child ordinarily resides throughout the tax year with that parent together with another parent of the child; or

(ii)  the parent may claim the EDC (as per paragraph 118(1)(b) of the Act) in respect of the child – or could claim the EDC if the child had no income for the year or certain limitations in paragraphs 118(4)(a) and (b) of the Act did not apply.

In circumstances where parents live separate and apart, and assuming both parents otherwise meet all the conditions for claiming the EDC in respect of a child, paragraph 118(4)(b) of the Act requires the parents to agree as to who will claim the EDC in respect of the child. If the parents cannot agree, neither parent will be allowed to make the claim.

Therefore, in light of the above limitations, and for the purpose of subparagraph 118(1)(b.1)(ii), neither parent is technically eligible to claim the EDC in respect of the child in the absence of such an agreement. Where the parents come to an agreement, the effect of both provisions (paragraphs 118(1)(b.1) and 118(4)(b)) is such that the CCC and the EDC must be claimed by the same parent in respect of the same child.

We trust our comments will be of assistance.

Yours truly,

Lita Krantz, CPA, CA
Manager, Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

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