Claiming nursing home fees

Instructions

1. Open the tax software
2. Review the Background information and Required slips (tax slips, receipts, etc.)
3. Provide all required information for the appropriate sections of the tax software
4. Once completed, compare your results with the solution provided
5. Afterwards, refer to the Takeaway points

Background information

Situation

Alexei received Canada Pension Plan (CPP) and old age security (OAS) benefits while living in a nursing home for all of 2024. He pays $16,200 per year to the nursing home. The receipt provided by the nursing home is not broken down for meals, accommodation or attendant care services. Alexei has been previously approved for the disability tax credit (DTC).

Identification information

Required slips

T4A(OAS) – Statement of Old Age Security (for Alexei)

T4A(P) – Statement of Canada Pension Plan Benefits (for Alexei)

Review your results

Solution to Claiming nursing home fees.

Takeaway points

Steps to follow

1. Review their background information and required slips
2. In Interview setup, tick the boxes next to Pension income, other income and split pension income, COVID-19 benefits (T4A, T4FHSA, T4A(OAS), T4A(P), T4A-RCA, T4RSP, T4RIF, T1032) in the Pension and other income section and Medical expenses, disability, caregiver in the Common tax deductions section
3. Click T4A, T4FHSA and pension income in the left-side menu, then click the + signs next to T4A(OAS) – Old age security pension and T4A(P) – Statement of Canada or Québec pension plan benefits to enter the amounts for each tax slip
4. Alexei’s T4A(P) indicates he received both CPP retirement and disability benefits throughout the year. The total number of months in the Number of months – retirement and Number of months - disability fields cannot exceed 12, so enter 6 into both fields
5. Click Medical, disability, caregiver in the left-side menu, then click the + signs next to Medical expenses in the Medical expenses section and Infirmity and Disability amounts claim for yourself* (line 31600) in the Disability deductions, caregiver section
6. Click Medical expenses in the left-side menu. In the Specified medical expenses (not claimed elsewhere) section, select Fees for a residential and long-term care centre from the drop-down menu and enter the nursing home fees into the field next to it
7. Click Infirmity/disability in the left-side menu and enter the information regarding the disability. In the Special rules when claiming the disability amount and attendant care as medical expenses section, select Let MaxBack decide from the Indicate how you wish to handle the disability amount and attendant care as medical expenses drop-down menu

Since Alexei qualifies for the disability amount, he has the option to claim the disability amount or the full nursing home fees, but not both. In this situation, it is more beneficial to claim the full nursing home fees as a medical expense instead of the disability tax credit. If you enter both the disability tax credit and medical expenses for a residential and long-term care centre into the software for the same tax return, the software does not claim the DTC.

For more information, refer to the UFile instructions.