Service Animal Tax Credit Expanded

Service Animal Tax  Credit ExpandedAs we approach the middle of the year and reflect on the recent tax deadline, we all want to ensure that we sent in our filings correctly. Every year Canadian tax laws change and what may be deductible in one year may not be deductible in the next.

One particular tax change that may have eluded Canadians, which, in certain circumstances, could have significant benefits, is the expansion of the Service Animal Medical Tax Credit. Prior to 2018, the tax creditable costs incurred for service animals were limited to certain situations primarily dealing with physical disabilities, but as proposed in the 2018 Budget and made effective the same year, the Service Animal Medical Tax Credit has been expanded. It now includes costs associated with specially trained animals that assist in coping with a severe mental impairment. This means many Canadians who require psychiatric service dogs for a host of issues such as post-traumatic stress disorder (PTSD) can receive a tax break.

The tax break is a minor tweak in our tax system and most Canadians won’t be affected, but it is a pivotal change for many people that have been seeking equality against a real and prevalent issue for a long time.

Studies suggest Canada is among the highest rated in PTSD

According to Veterans Affairs Canada, 18% of veterans receive a disability benefit for a mental health condition and 73% of those receive it specifically for post-traumatic stress disorder (PTSD). Other facts include:

  • Canada having the highest incidence of PTSD across 24 countries studied;
  • 9.2% of Canadians will suffer from PTSD at some point in their lifetime;
  • PTSD affects twice as many women as men.

With the above points in mind and the ever-changing treatments for mental health and impairment issues, service animals play an integral part of the solution. This tax break is a positive step forward in our system for many that already have a lot of issues to deal with on a daily basis.

Eligible Costs

The costs of a service animal is significant, ranging from training costs to reoccurring maintenance, and the tax credit will provide relief for costs such as:

  • the cost of the service animal;
  • the cost for its care and maintenance, including food and veterinary care;
  • reasonable travel expenses incurred for a patient to attend a facility that trains patients in the handling of such animals; and
  • reasonable board and lodging expenses for a patient’s full-time attendance at such a facility.

Canadian tax law is expected to continue to evolve as the economy progresses and society changes, and this initiative is a positive one that addresses an issue which is often overlooked.