A couple of tax programs to be aware of that could get you some tax money back on needed renovations for those age 65 or older that make your home safer.
Federal Program
The Home Accessibility Tax Credit, which is a non-refundable tax credit, was introduced in the Federal 2015 Budget. The credit is for qualifying expenses incurred in 2016 or later, for work performed or goods acquired in respect of a qualifying renovation of an eligible dwelling of a qualifying individual. The HATC can be claimed by a qualifying individual or an eligible individual.
A qualifying individual is an individual for this program is someone that is 65 years or older before the end of the taxation year or who is eligible to claim the disability tax credit at any time in the taxation year.
The HATC applies to the total qualifying expenses, up to a maximum of $10,000 per year. The credit is at the lowest personal tax rate of 15%, so the maximum tax reduction per year is $1,500 ($10,000 x 15%). Thus, $1,500 is available from the Federal Program. Please note that this program is capped and if there are two qualifying individuals in the same principal residence, the maximum is $10,000 related to that principal.
Medical Expense Tax Credit
If a qualifying expense also qualifies for the medical expense tax credit (METC), both the METC and the HATC can be claimed for the same expense (nice added bonus here).
What Qualifies for the Federal Program
re Qualifying Renovation (safety and mobility focus)
A qualifying renovation is one of an enduring nature and is integral to the eligible dwelling.
The renovation must:
a) allow the qualifying individual to gain access to, or to be mobile or function within, the eligible dwelling; or
b) reduce the risk of harm to the qualifying individual within the eligible dwelling or in gaining access to the dwelling allow the qualifying individual to gain access to, or to be mobile or function within, the eligible dwelling; or
c) reduce the risk of harm to the qualifying individual within the eligible dwelling or in gaining access to the dwelling
Ontario Program for 2021 Re Senior's Home Safety Tax Credit
The Seniors’ Home Safety Tax Credit is worth 25% of up to $10,000 in eligible expenses for a senior’s principal residence in Ontario. The maximum credit is $2,500.
Seniors are age 65 by the end of 2021 and or people who live with senior relatives can make the claim.
The Seniors’ Home Safety Tax Credit is a refundable personal income tax credit. This means that if you’re eligible, you can get a tax credit regardless of your income or whether you owe income taxes for 2021.
Expenses that are eligible for the Ontario program are if they are for home renovations that improve safety and accessibility or help a senior be more functional or mobile at home, for example:
grab bars and related reinforcements around the toilet, bathtub and shower
wheelchair ramps
stair lifts
elevators
renovations to permit first floor occupancy or a secondary suite for a senior
Expenses must be paid or payable in 2021.
You can claim the credit on your 2021 Income Tax and Benefit Return.
To claim the tax credit, seniors or their family members should get receipts from suppliers and contractors, helping to ensure that vendors report these amounts for tax purposes.
The Ontario tax credit is refundable and a bit more restrictive or targeted than the Federal Credit which is non refundable (caution to low income seniors on the Federal Tax credit).
Conclusion
So if you are considering improving your home for safety and mobility reasons then this is the year to do it and get some government assistance making your home safer as a Senior.
I hope you enjoyed this. If you have any questions or comments, I would be happy to assist you. Please call me at 905-898-3355 or email peter@taxhome.net
February 19, 2021
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