Welcome to another one of my video blogs, today’s topic is on the amount for eligible dependent, line 305 of schedule one of your T1 General Canadian Income Tax Return. It’s a non-refundable tax credit, which can help reduce your basic federal taxes, with a value of up to 15% of $10,527 (2011 year) now there are some conditions for the eligibility for this tax credit. The first is you can`t have spouse of common law partner during the year, and if so, they weren`t living with you. Secondly, if you had a dependent, you were supporting them for food, shelter and clothing, and thirdly, they lived within your household. Now if you`ve met those three conditions, than we go to the two groups of category’s in which the eligible dependent may come from. The first category is older individuals, such as your mother, father, grandmother or grandfather. They are only subject to the income limitations. The second group is younger people, such as you child, your grandchild, or your brother or sister. It can be a blood relative, marriage relative, or adoptive relative. Now under the second category, you must be under the age of 18, or suffering from a mental or physical impairment. If you choose a dependent, who is suffering from a physical or mental impairment, be sure to have some sort of correspondence from a doctor, just in case the CRA decides to do an audit-review on your claim.
Now what are situations where you can`t claim the eligible dependent amount. The first situation is where you claim a box 303 non-refundable tax credit for the spousal amount. This happens usually when you have two married spouses, and one of them has less income than the basic exemption of $10,527-2011, and the second spouse is able to claim the difference as an additional tax credit. There is one small situation where you can be married, and also claim the eligible dependent tax credit, well get to that later.
The first situation is where you are claiming box 303 (spousal amount), than you can`t claim box 305.
The second situation is where you are trying to claim as a dependent, someone who is also being claimed by someone else. Now say for example, you are living with your sister, and your sister is claiming your daughter as an eligible dependent, well than you can`t because a person can only be claimed once as a eligible dependent, and their can only be one eligible dependent per household,
A third situation is where you are trying to claim a child, for which you are making child support payments on behalf of. You can`t claim that person as an eligible dependent, unless you are, for part of the year, separated or not living with your current spouse, and you are making support payments on behalf of that spouse, and you are not claiming then on line 220 of your T1 Canadian income tax return for support deductions. If you are not, than you can claim that child as an eligible dependent.
Another situation, which I mentioned before, is when you can claim the eligible dependent, when in fact you have a spouse. This usually occurs in the year when you are getting married. Say for example you are a man, and you support your daughter, and you have just been divorced for two years, and you have had custody of that child. You probably have been claiming that child for the eligible dependent. So 2011 comes along, and that person decides to remarry in July of 2011. Now they will file their income tax return at the end of 2011, as a couple, so you will have two spouses, but you will also have a child you are supporting as a dependent for the first half of the year. In that case you can claim the eligible dependent amount, for 15% of $10,527 as long as your spouse has income greater than $10,527. There she won`t be eligible for the box 303 spousal amount.
Now say for example, you married that spouse in 2011, and that spouse had no income in 2011 ,obviously, you would be claiming the line 303 spousal amount, you would be using her full spousal credit, than you can`t claim the eligible dependent amount for your daughter.
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