Eligible Dependent Credit

Overview: An eligible dependent credit is the equivalent of the spousal/common-law amount tax credit for individuals that do not have a spouse or common-law partner and also have a dependent.

Amount: A personal non-refundable tax credit of $11,635, less any income earned by the eligible dependent, multiplied by 20% (15% federal + 5% provincial). As an example, if you have a dependent that earns $5,000 during the year, you would receive a credit of $6,635. This credit is then multiplied by 20% to lower your taxes payable by $1,327.

Details: Single parents can claim one of their children as an eligible dependent if at any point (doesn’t need to be the full year) during the year they met all these criteria at the same time:

  • Did not have a spouse or common-law partner or, if they did, were not living with, supporting, or being supported by that person.
  • Supported the dependent during the year.
  • Lived with the dependent in their home.

As an example, if you got a divorce half way through the year, and you meet all three of the criteria above for the second half of the year for one of your children, you would be able to claim either the spousal/common-law amount tax credit or the eligible dependent credit, whichever is more beneficial.

The eligible dependent credit is not limited to just your children. The criteria to claim someone as an eligible dependent require them to be:

  • your parent or grandparent by blood, marriage, common-law partnership, or adoption; or
  • your child, grandchild, brother, or sister, by blood, marriage, common-law partnership, or adoption and under 18 years of age or had an impairment in physical or mental functions.

Some exceptions:

  • You cannot claim both the spousal/common-law amount tax credit and the eligible dependent credit.
  • You can only claim one eligible dependent for this credit.
  • You cannot claim this for a child for whom you had to make support payments.
  • If you and someone else have shared custody of a child, only one of you can claim this child as an eligible dependent. However, if you have shared custody over two children, each of you can claim one of the children (assuming you meet all the criteria mentioned). It is important to clarify who is claiming whom as often written confirmation from the other parent is required during an audit to ensure you are both not claiming the same child.

Click here for more information.

Note: Information has been summarized for ease of understanding. There are always exceptions to tax rules. Contact Zachara Accounting if you want assistance in preparing your return.