Care of an aging parent is more and more of a reality these days. There are five main scenarios where you can potentially claim credits for caring for an aging parent, which could help reduce the tax on your personal returns when you file this year:

1. The Canada Caregiver Credit (CCC)

This is for clients who support a parent or grandparent with a physical or mental impairment.  The parent does not need to live with the client, but they must be "dependent on the client for support" because of their health.  A formal Disability Tax Credit (DTC) form is not usually required, but the CRA may ask for a doctor’s note describing the impairment, so be prepared with that if you are claiming the CCC credit.This credit is also based on the parent’s income: the credit begins to reduce if the parent’s 2025 net income is over $20,197 and is completely eliminated once their income hits $28,798.

2. Disability Tax Credit (DTC) Transfer

If a parent has a "severe and prolonged" impairment and has a CRA-approved Form T2201 on file, they can potentially transfer their unused credit to their child.  However, this only works if the parent has little to no income (and thus little or no tax to pay).  You must also be able to show that the parent relies on you for the "basic necessities of life" (food, shelter, or clothing) on a regular and consistent basis.

3. Medical Expense Strategy

This is an often-overlooked strategy for your aging parents.  As with the CCC credit, the parent doesn’t have to live with you, but they must be dependent on you for support because of their health.  If they are considered dependent, you can claim medical expenses that you paid for a dependent parent on your own return.  This can include everything from hearing aids and prescriptions to the "medical portion" of home care, attendant care wages or nursing home fees.

Be careful here – because of the "3% of income" threshold, it is almost always more efficient to claim the parents’ expenses on their return first as they usually have lower income and therefore a lower medical threshold to meet.  You can transfer any leftover medical credit to your own return after.

4. Home Accessibility Tax Credit (HATC)

If your parent is 65+ or DTC eligible, any renovations that were done to allow for better accessibility may be claimed for the HATC credit, which could garner $3,000 in non-refundable tax credits.  This could include renovations like walk-in tubs, ramps, grip bars, or even elevators.  The catch here is the renovations must be done on the parent’s principle residence, or their child’s PR if the parent lives there.  

The “Double Dip”

For the 2025 tax year, you can "double dip" certain expenses. For example, if a renovation on your home qualifies as both a medical expense and a home accessibility expense, you can claim it under both credits.  However, Budget 2025 proposed to end this for the 2026 tax year, making 2025 the final "bonus" year for this double dip.

5. Multigenerational Home Renovation Tax Credit (MHRTC)

Lastly, the MHRTC is a refundable credit for building a secondary suite in your own home for your aging parents.  It must be a self-contained unit built with a building permit and contain a private entrance, kitchen, and bathroom, but your new mother-in-law suite could get you up to $7,250 in credits on your return.  

So gather up your receipts and send them off to your tax preparer, taking care of your aging parents may help reduce your tax payable this year.