LONG-TERM CARE HOME EXPENSES

Summary of what can be claimed as a medical expense:

An accommodation fee is inclusive of lodging, food, nursing care, laundry, and certain other personal services that LTC homes are required to provide by law.

Any extra or optional charges cannot be claimed as a medical expense, such as fees for hairdressing, internet, and cable tv (unless the extra charge is, independently, an allowable medical expense under the Income Tax Act.)

Declarations for Ontario Energy and Property Tax Credit:

If the LTC home is privately owned (ie it pays property tax):

If the home issued a receipt that breaks down the accommodation fee to include a rent portion, then only that portion can be declared as rent. If the receipt does not break out rent, then 75% of the accommodation fee can be declared as rent.

If the LTC home is publicly owned or non-profit (it doesn’t pay property tax):

The entire accommodation fee can be declared, but not as rent. Instead, UFile has a separate category under declarations for public and non-profit long-term care homes, and the software will enter the amount in box 61230 of the ON-BEN form. The client will receive a credit for the energy component of the OEPTC, but not for the property tax component.

In a situation where one spouse lives in a LTC home and the other lives in a different place, both spouses can separately claim the OEPTC.

Detailed Information

What is a Long Term Care Home and a nursing home?

In Ontario, a Long-Term Care Home (LTC Home) is a facility licensed under the Fixing Long-Term Care Act, 2021. No one may operate residential premises that provide nursing care to two or more unrelated individuals without a license.^[1] This licensing requirement does not apply to hospitals or retirement homes.^[2]

LTC Homes are generally required to provide full-time nursing care. They are publicly funded by the Ontario government and are subject to strict regulations. These facilities are sometimes referred to as nursing homes, but it’s important to note that a retirement home is not considered an LTC Home, even if it offers full-time nursing care.

Some LTC homes are owned and operated privately by for-profit or non-profit corporations, and some publicly by municipalities.^[3]  No one can operate an LTC Home without a license.

For tax purposes, the Income Tax Act uses the term “nursing home” when referring to eligible medical expenses. Although the Act and its regulations do not define “nursing home,” the CRA provides guidance on the meaning of the term in its tax folio:

1.33 A nursing home is generally considered to be an establishment that provides full-time maintenance or nursing home care for patients who are unable to care for themselves. While a particular place need not be a licensed nursing home, it must have the equivalent features and characteristics of a nursing home. For example, a nursing home is normally a facility of a public character which offers 24-hour nursing care to patients who are not related to the facility owner/operator. The use of the expression full-time care in a nursing home is not intended to place a requirement of a minimum time spent caring for a patient but rather implies the constant care and attendance required by the patient by reason of an injury, illness or disability of the patient. The CRA is generally of the view that a retirement home does not provide the care required to be classified as a nursing home.

In the case of a facility that provides multiple levels of care, the facility would be considered a nursing home only in respect of the portion of the facility that provides regular nursing care of the type provided by a nursing home.

An LTC Home qualifies as a “nursing home” under the Income Tax Act.  However, some premises other than a LTC Home could qualify as a nursing home.  However, other types of premises could also qualify as a nursing home. For example, while the CRA generally considers a retirement home not to be a nursing home, a retirement home—or a portion of one—could qualify if it provides full-time nursing care.^[4]

What do LTC Homes charge?

All LTC Homes, regardless of whether they are publicly or privately operated, must follow the Act’s prescribed maximum co-payment fees for accommodation. As of 2024, these fees range from approximately $2,000 to $3,000 per month, depending on the type of room—basic, semi-private, or private. Residents with low income may apply for financial assistance under the Long-Term Care Rate Reduction Program to reduce their co-payment.

What does the LTC Home co-payment accommodation fee cover, and not cover?

The accommodation fee covers lodging, meals, nursing care, attendant care, housekeeping services, laundry services, recreational programming, and some other related care services.  In addition to the prescribed accommodation fee, a LTC Home can charge extra for optional goods and services such as transportation, hairdressing, telephone, internet, and cable tv.  

Can the entire accommodation LTC Home fee be claimed as a medical expense?

Each year the CRA issues a Medical Expenses Guide (RC4065) which makes it clear that the entire accommodation fee can be claimed, but not the extra optional expenses. The guide explains:

“Generally, you can claim the entire amount you paid for care at..nursing homes (full time care)...  All regular fees paid for full-time care in a nursing home…are eligible as medical expenses, including for all of the following:

        - food

        - accommodation

        - nursing care

        - administration fees

        - maintenance fees

         - social programming and activities fees

However, extra personal expenses (such as hairdresser fees) are not eligible”        

LTC homes usually issue an annual statement showing the co-payment accommodation fee separately from any extra or optional charges. The extra charges typically cannot be claimed as medical expenses.

An exception would apply if an extra charge is for a good or service that independently qualifies as a medical expense under the Income Tax Act. Similarly, if the client paid an external service provider for additional goods or services that  meet the Income Tax Act’s definition of a medical expense, these amounts may also be eligible.

Does the client require a Disability Tax Certificate to claim the full accommodation expense?

No. To claim the full accommodation expense, the client must provide either:

1. A Disability Tax Credit (DTC) Certificate, or
2. A written statement from a medical practitioner confirming that the client is, and is expected to remain, dependent on others for personal care and daily needs due to a lack of normal mental capacity.

What options are available if the client has a DTC Certificate (T2201)?
 The available options depend on whether the LTC home’s receipt separates an amount for attendant care.

Attendant care refers to personal care provided by an attendant, typically a personal support worker (PSW) or nurse. This care covers tasks that the client cannot perform independently, including:

• Dressing, grooming, and bathing
• Food preparation and feeding
• Mobility assistance
• Laundry and room cleaning
• Supervisory care and exercise assistance
• Skin care and medication management

1.        UFile steps if the receipt does not break out an amount for attendant care:

The client can claim the accommodation fee as a medical expense for the medical expense tax credit, or the client can claim the disability tax credit, but not both.

Follow these steps:

1. To claim the medical tax credit: In the interview setup tab, select the box: Medical Expenses, disability, caregiver. In the Medical Expenses section, there is a sub-section, Specified medical expenses (not claimed elsewhere) and you can choose the option Fees for a residential and long-term care centre.
2. To instead claim the disability tax credit, don’t enter the accommodation fee as a medical expense. In the interview setup tab, select the box: Medical Expenses, disability, caregiver. In the Infirmity and Disability section, there is a sub-section, Are you eligible for the disability amount on federal line 31600. Choose yes.

2.        UFile steps if the receipt does break out an amount for attendant care, and the client wishes to claim up to $10,000 of attendant care expenses and the disability tax credit:

The client can claim up to $10,000 of attendant care expenses as a medical expense. Follow these steps:

1. In the Interview setup tab, select the box: Medical Expenses, disability, caregiver. In the Medical Expenses section, there is a sub-section, Specified medical expenses (not claimed elsewhere). Choose the option Cost of attendant care. Enter the attendant care amount in the box. If there are other expenses detailed in the receipt besides attendant care, and the expense independently qualifies as a medical expense, the expense can be claimed as a regular medical expense.
2. In the interview setup tab, select the box: Medical Expenses, disability, caregiver. In the Infirmity and Disability section, there is a sub-section, Are you eligible for the disability amount on federal line 31600. Choose yes.

Declaring an LTC Home accommodation fee for the Trillium Benefit

The Trillium benefit is an umbrella term for three refundable tax credits, including the Ontario Energy and Property Tax Credit (OEPTC).

Some property owners pay property tax and sales tax on electricity/gas, which are passed on to tenants or residents. The OEPTC is designed to provide a partial rebate of these costs for lower income individuals.

The credit has two components: an energy component and a property tax component. The credit is based on calculations that considers amounts paid for rent, property tax, student residence, or accommodation at a LTC home. The calculation varies depending on whether the property is owned by an entity that pays municipal taxes and whether the taxpayer is age 64 or older as of December 31 of the tax year.  

Some LTC homes may break out a specific amount for rent. If not, the rent is 75% of the total co-payment accommodation fee. A Government of Canada website states as follows regarding the ON-BEN application:^[5]

“If you lived in a private long-term care home, hospital, group home, chronic care facility, or a similar institution and the institution paid full municipal and school taxes, enter your rent beside box 61100. If the facility does not break down the cost of room and board (meals, laundering, or other services) on your receipt, you can claim an amount of up to 75% of your total payments as rent.”

UFile will not automatically calculate 75% of the accommodation fee.  The preparer must determine or calculate the rent portion. If the LTC receipt does not specify rent, the preparer should multiply the total co-payment accommodation fee by 75%.

Steps in UFile if one spouse is in a LTC Home and the other lives somewhere else:

Each spouse can separately apply for the OEPTC. The CRA considers the spouses to be involuntarily separated and each spouse’s OEPTC claim will be calculated as if they were single. Special UFile steps are required. Assuming the head lives on his own and the spouse lives in an LTC Home:

1. In the spouse identification section, answer “no” to the question, “Do you have the same address as your spouse?”.
2. In the spouse Current address section, put whatever mail address the spouse wants (ie the address of the head, or the address of the LTC home. If you put the head’s address, then answer “no” to the question, “Is your home address the same as your mailing address”.
3. For the head and spouse, in the ON-BEN section, there is a subsection headed, Involuntary separation. In that subsection, answer “yes” to the question, “Do you want to apply individually?”.
4. For the head and spouse, click Ontario tax credits on the left, and then in the Ontario tax credits section, click the plus sign next to Separate residences. Answer “yes” to the question, “Do you live at a different address from your spouse?”.
5. For the spouse, if the Current address section has the address of the head, then in the ON-BEN rent declaration section, enter the address of the LTC home.
6. To check that everything was done properly, look at the benefit calculations, and look at both ON-BEN forms to make sure that Parts B and C are properly completed with the correct addresses.

References:

Re: Long Term Care Homes

1. Ontario Fixing Long-Term Care Homes Act, 2021

Re: Medical Expenses:

1. Income Tax Folio S1-F1-C1, Medical Expenses Tax Credit
2. Guide RC4065 Medical Expenses

Re: Trillium Benefit

1. Ontario Taxation Act, 2007, primarily sections 103.9 to 103.11.
2. Government of Canada Webpage: Ontario Energy and Property Tax Credit Questions and Answers - Canada.ca