Chapter History S1-F4-C2, Basic Personal and Dependant Tax Credits (for 2017 and subsequent tax years) 

Introduction

The purpose of a Chapter History page is to highlight any amendments to the information contained in a chapter of an income tax folio, including amendments to the information originally contained in an interpretation bulletin that has been cancelled and replaced with a folio chapter. It outlines amendments that have been made as a result of legislative changes and proposed legislative changes, precedential court decisions, as well as new or revised interpretations of the Canada Revenue Agency (CRA).

Except as otherwise noted, all statutory references herein are references to provisions of the Income Tax Act, R.S.C., 1985, c.1 (5th Supp.), as amended and all references to a regulation are to the Income Tax Regulations, C.R.C., c. 945, as amended.

Update April 17, 2025

General changes were made to the various examples throughout the chapter to update indexed amounts to reflect more recent values. 

Throughout the Chapter, references linking amounts to the Indexation Adjustment chart have been updated to reflect the revised titles used in the chart.

¶2.2 has been updated to reflect the legislative amendments to section 118, made by S.C. 2021, c. 23 (formerly Bill C-30), that updated how the personal tax credits are calculated for tax years after 2019.

¶2.15 has been updated to clarify that annulment and divorce apply to marriage, and separation applies to common-law partnership.

¶2.19 has been updated to clarify that the support must be from the individual’s own resources and the person receiving the support must rely on the individual’s contributions. This paragraph has also been expanded to address situations where a dependant has income during the year.

¶2.25 has been updated with an editorial change to the variables in the formula.

¶2.25.1 has been added to refer to the basic personal tax credit in subsection 118(1) that was available for the tax years prior to 2020, that is, prior to the legislative amendments to section 118 made by S.C. 2021, c. 23 (formerly Bill C-30) for the 2020 and subsequent tax years.

¶2.25.2 has been added to provide the calculation of the basic personal amount as defined under subsection 118(1.1) for the 2020 and subsequent tax years, as added by S.C. 2021, c. 23, s. 19. This basic personal amount is also used for purposes of calculating the spouse or common-law partner tax credit in ¶2.27 and the eligible dependant tax credit in ¶2.42. An example has been added to illustrate the new calculation of the basic personal amount. As a result of these changes, the variables found in the formulas throughout the chapter have been updated.

¶2.27, 2.28 and 2.29 have been updated to provide the calculation of the spouse or common-law partner tax credit which relies on the basic personal amount (as amended by S.C. 2021, c. 23, s. 19), as described in ¶2.25 to 2.25.2.

The example in ¶2.38 has been updated to reflect the updated formula described in ¶2.27 to 2.29.

¶2.42, 2.43, 2.44 and 2.46 have been updated to provide the calculation of the eligible dependant tax credit which relies on the basic personal amount (as amended by S.C. 2021, c. 23, s. 19), as described in ¶2.25 to 2.25.2.

The example in ¶2.58 has been updated to reflect the updated formula described in ¶2.42 to 2.46.

Update August 5, 2020

Throughout the Chapter, references linking amounts to the Indexation Adjustment chart have been updated to reflect the revised titles used in the chart.

Update April 8, 2019

General

Income Tax Folio S1-F4-C2, Basic Personal and Dependant Tax Credits (for 2017 and subsequent years) is an update to Income Tax Folio S1-F4-C1, Basic Personal and Dependant Tax Credits, which replaced and canceled Interpretation Bulletin IT-513R, Personal Tax Credits, on April 29, 2017. Note that Income Tax Folio S1-F4-C1 has been renamed Income Tax Folio S1-F4-C1, Basic Personal and Dependant Tax Credits (for 2016 and prior years).

This Chapter discusses the eligibility requirements of the personal tax credits for the 2017 and subsequent tax years. This Chapter History outlines any substantive technical and interpretative changes to the personal credits information outlined in Income Tax Folio S1-F4-C1. Going forward it will outline changes made to Income Tax Folio S1-F4-C2. Any substantive technical and interpretive changes to the information outlined in the former interpretation bulletin are described in the Chapter History for Income Tax Folio S1-F4-C1.

For tax years prior to 2017, please refer to Income Tax Folio S1-F4-C1, Basic Personal and Dependant Tax Credits (for 2016 and prior tax years).

Legislative and other changes

The Chapter has been updated to reflect the new Canada caregiver credit. The Canada caregiver credit was enacted by S.C. 2017, c. 20, s. 12 and replaced the caregiver tax credit, the infirm dependant tax credit, and the family caregiver tax credit. In this Chapter, the Canada caregiver credit is referred to as the Canada caregiver tax credit (adult) and the Canada caregiver tax credit (child). All references to the previous credits have been removed.

¶2.16 has been added to describe the limitation in paragraph 118(4)(a.2) which states that income is computed without reference to the deduction on account of split income as added by S.C. 2018, c. 12, s. 11(3).

¶2.38 has been added to describe the expanded limitation in paragraph 118(4)(c) which prevents an individual from claiming the Canada caregiver tax credit (adult) for a person if the individual is entitled to claim the spouse or common-law partner tax credit for that same person, as added by S.C. 2017, c. 20, s. 12(5). An example has been included.