I remain the Funny Accountant, however what I discovered the other day was more scary and sad than funny. It turns out that not even Revenu Quebec (“RQ”) is familiar with some of their own tax rules and many of the elderly in this Province (and likely elsewhere in Canada) have been doing their taxes wrong for up to 5 years.
Without getting into the gritty details, in short, I decided to call RQ after revisiting an issue that has been plaguing me (and all other tax accountants) for a long time, the treatment of expenses for a living in a seniors’ residence or a nursing home. After speaking to a very nice RQ Senior Manager for over AN HOUR on the phone the other day, we both discovered that the Province of Quebec has no definition for “nursing home”. This is kind of a problem given that the tax guide refers to “expenses incurred for habitation in a nursing home” more than a few times. Funny?? You betcha! The next part…..not so much.
Nursing home expenses (with a few exceptions and conditions) can be used as medical expenses. Rent paid to live in a senior residence cannot. The problem is that Quebec dangles a beautiful, orange carrot in front of the elderly called the Tax Credit for Home Support Services for Seniors, a program that they advertised like it was New Coke a few years ago. Obviously, seniors (and their accountants alike) said to themselves, “if I get this AWESOME tax credit then I’m laughing my way to the bank!”. Turns out that certain people may have been better off not claiming that credit. In fact, I discovered that a new client of mine had been doing it wrong for 3 years running, costing her…..wait for it….about $8,000 PER YEAR in excess tax that she should never have paid. That’s a lot of lost cash for anyone to manage but especially so for a person in their golden years and on a fixed income.
I’m not asking for you to switch your tax accounting to me. My goal in writing this post is to fix a wrong in the world. I hate to see anyone being taken advantage of or toyed with in our society, especially those who may be slightly less able to protect themselves. That being said, I invite anyone reading this to ask questions about the specific rules mentioned above and how they might apply to you, your parents, your grandparents, a friend or even a neighbour who you think might need a heads-up. So post comments below, ask questions on the Facebook Page (and like it while you’re there!) or, preferably (because it’s more fun!) Tweet at me! As I mentioned last week, I don’t charge for an initial meeting which includes any time spent answering questions from blog readers! I look forward to hearing from you.
The Fuzzy (and Funny) Accountant
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One thought on “The Elderly and Taxes Gone Wrong: A Not-So-Funny Discovery by The Funny Accountant”
I read with great interest your comments with regards to Rev Quebec’s definition of a nursing home. My mother passed away last year and during the 1st 6 months of 2015 she paid 25K in private residence fees due to her high care needs. CRA has a very clear cut definition of attendant care expenses which are allowable as medical expenses and I was under the impression that the same definition applied to Quebec. Revenu Quebec requested details of the medical expenses included on the final tax return and have now informed me that a private residence does not meet the criteria of a “nursing home ” if an RN is not present at least 20 hours a day 7 days per week. When I contacted the residence where my mother was in the high care section I discovered that in fact there is an RN for 3 hours per day and the balance of the time the patients are cared for by Licensed pratical nurses (LPN). My mother had received the disability tax credit so there was no doubt about the high level of care she required so I would like to ensure that I have received correct information (I did not find the definition on the Rev Que website) and whether or not I could object to the Rev Que assessment. This assessment has added a tax burden of 3K to the estate. Any information or guidance you could provide would be greatly appreciated.