Budget 2025:
CRA Information on select measures

The HATC is a non-refundable tax credit for eligible home renovation or alteration expenses that allow a qualifying individual to gain access to, or to be mobile or functional within the eligible dwelling or reduce the risk of harm to the qualifying individual within the dwelling or in gaining access to the dwelling.

For more information see Line 31285 – Home accessibility expenses.

The METC is a non-refundable tax credit for eligible medical expenses in excess of the lesser of $2,834 (for 2025) and 3% of the individual’s net income.

For more information see Lines 33099 and 33199 – Eligible medical expenses you can claim on your tax return.

Currently, if a taxpayer has eligible expenses that qualify for both the HATC and the METC, they can claim both credits in respect of the same expense.

For 2026 and subsequent taxation years, the Budget proposes to exclude expenses that have been claimed under the METC from the definition of a qualifying expenditure for the purposes of the HATC. Therefore, a taxpayer can no longer claim both the HATC and the METC in respect of the same expense.

Check online at Canada.ca regularly for updated forms, policies, guidelines, questions and answers, and guidance.

In the meantime, please consult Finance Canada's Budget 2025 documents for details.

The PSWTC is a new refundable tax credit available for the 2026 to 2030 taxation years. The credit is equal to the lesser of $1,100 and 5% of the Eligible PSWs yearly eligible remuneration (eligible earnings).

To be considered an Eligible PSW a person must perform duties of employment in the capacity of a personal support worker for an Eligible HCE during the taxation year. In performing their duties of employment, the individual must ordinarily provide one-on-one care and essential support to optimize and maintain another individual’s health, well-being, safety, autonomy, and comfort consistent with that individual’s health care needs, as directed by a regulated health care professional or a provincial community health organization. The individual’s main duties of employment must include assisting individuals with activities of daily living and mobilization.

Eligible HCEs are hospitals, nursing care facilities, residential care facilities, community care facilities for the elderly, home health care establishments and similar regulated health care establishments.

To be considered eligible earnings the amounts must:

• be income for the taxation year from an office or employment as an Eligible PSW for an Eligible HCE in a province or territory;
• not be amounts for duties performed in British Columbia, Newfoundland and Labrador or the Northwest Territories; and
• be certified by the individual’s employer using a new code on the T4 slip.

Amounts earned for duties performed in British Columbia, Newfoundland and Labrador, and the Northwest Territories are not eligible since those jurisdictions have signed bilateral agreements with the federal government that provide funding over five years to increase PSWs’ wages.

Eligible PSWs may claim a refundable tax credit of 5% of their eligible earnings, up to a maximum credit of $1,100 per year.

The PSWTC is calculated by multiplying the Eligible PSW’s eligible earnings by 5%. The amount that may be claimed in a year would be the amount equal to the lesser of the calculated amount and $1,100.

Example 1: Elaine had eligible earnings of $50,000 for the 2026 taxation year.

• $50,000 x 5% = $2,500
• As 5% of Elaine’s eligible earnings is more than the $1,100 maximum, Elaine’s PSWTC would be limited to $1,100.

Example 2: Sergio had eligible earnings of $20,000 for the 2026 taxation year.

• $20,000 x 5% = $1,000
• As 5% of Sergio’s eligible earnings is less than $1,100, Sergio’s PSWTC would be limited to $1,000.

Eligible PSWs must file an income tax return to claim this refundable tax credit.

The Eligible PSW’s employer must certify their employees’ eligible earnings by completing a new “other information” code on the employee’s T4 slip. The amount included in this new code is enough to support a claim for the PSWTC.

If an employer will not certify amounts that should be considered eligible earnings of a PSW, an employee can contact the CRA to submit a complaint, which will initiate a review to determine if an amended T4 slip is required. A unionized employee may also be able to contact their union representative for assistance. Suspected non-compliance with the PSWTC rules can also be reported through the CRA’s Leads Program.

The PSWTC may still be claimed for an eligible PSW on their return for the year of death.

If an Eligible PSW declares bankruptcy in a taxation year, that Eligible PSW’s eligible earnings from both the pre-bankruptcy and post-bankruptcy period would be taken into consideration when computing this tax credit.

Check online at Canada.ca regularly for updated forms, policies, guidelines, questions and answers, and guidance. In the meantime, please consult Finance Canada's Budget 2025 documents for details.