CRA GST/HST Personal Support Worker (PSW), Companion Care & Non-Medical Home Assistance Audit — Montreal CPA Firm Near You: Defending Taxable vs Exempt Services, Travel Fees, Subcontractors & ITCs

A CRA GST/HST Personal Support Worker (PSW) & Non-Medical Home-Care Audit targets:

• personal support workers (PSWs)
• senior companion-care providers
• non-medical home-care aides
• home helpers (cooking, cleaning, errands)
• mobility assistance providers
• respite-care helpers (non-nursing)
• daily-living support workers
• post-hospital non-medical care teams
• live-out home-help subcontractors

This is one of CRA’s most misunderstood sectors because many PSWs mistakenly believe their services are “healthcare-exempt.” In reality, only regulated health professionals providing medical treatment are exempt. PSWs and non-medical support workers are fully taxable unless working under a regulated nurse/clinic.

Mackisen CPA Montreal specializes in defending PSWs and home-care companies by classifying services correctly, validating subcontractors, reconstructing ITCs, and building CRA-compliant audit documentation.

Legal Foundation

Excise Tax Act – Exempt vs Taxable Rules

Exempt (Schedule V, Part II):
ONLY applies to services provided by regulated health professionals (nurses, physicians, physios, OTs, RNs, LPNs, social workers, etc.).

NOT exempt (100% taxable):

• Personal support

• Companion care

• Assistance with daily living

• Errands, housekeeping, meal prep

• Bathing/dressing support (non-medical)

• Post-surgery home help without regulated nurse oversight

• Accompaniment to appointments

• Patient-sitting services

Other Relevant ETA Sections

• s.165 — GST/HST must be applied unless exempt by law

• s.221 — supplier responsible to collect GST/HST

• s.169 — ITCs require full documentation

• s.141.01 — mixed-use allocations (vehicle, home office)

• Schedule IX — GST/HST rate depends on location of service recipient

• s.123(1) — defines “health-care service,” “practitioner,” “exempt supply”

Case Law

• Courts consistently rule PSW, companion care & home assistance taxable, not exempt

• Only nursing services provided by regulated nurses may be exempt

• Royal Bank v. Canada — ITC denied if documentation incomplete

Learning insight: Non-medical home-care is always taxable, even when supporting a senior or recovering patient.

Why CRA Audits PSWs, Companion-Care Providers & Home-Care Companies

Revenue Risks

• GST/HST not charged on taxable PSW services
• invoices labelled “healthcare” instead of “personal support”
• cash/e-transfer payments underreported
• travel fees, errands & hourly charges missing GST
• meal-prep, cleaning, mobility assistance not invoiced properly
• multi-visit weekly schedules not documented
• respite care incorrectly treated as exempt
• deposits for long-term contracts unreported

Subcontractor Risks

• subcontract PSWs without GST numbers
• helpers paid cash without invoices
• invalid subcontractor GST registrations
• T4A non-compliance
• “under-the-table” support workers

ITC Risks

• missing receipts for:
– PPE, gloves, masks
– mileage & fuel
– cell phone & communication
– meal-prep supplies (non-deductible if for client; ITC NOT allowed)
– mobile support equipment
– software (scheduling, timesheet apps)
• personal expenses claimed as business
• imported caregiving equipment missing s.218 self-assessment
• home-office overclaims

Operational Risks

• weekly visit logs missing or inconsistent
• inconsistent caregiver schedules vs deposits
• no documentation of service type (PSW vs medical)
• unclear boundaries between cleaning vs care
• family members paying privately with no invoice trail

High-risk operators:

• independent PSWs

• senior-care companionship providers

• home-care agencies

• recovery assistance teams

• hybrid cleaning + care services

Learning insight: CRA focuses on the classification — medical = exempt; everything else = taxable.

CRA PSW/Home-Care Audit Process

1. CRA requests:
   – invoices for all services
   – timesheets & visit logs
   – client schedules & care plans
   – subcontractor invoices + GST numbers
   – bank/e-transfer payment history
   – vehicle mileage logs
   – PPE & equipment purchase receipts
   – ITC spreadsheets
   – import documents

2. CRA tests:
   • is service medical (exempt) or non-medical (taxable)?
   • GST/HST charged on all taxable services?
   • subcontractor GST compliance?
   • ITC eligibility & documentation
   • logs → invoices → deposits → GST alignment
   • travel-fee GST/HST
   • multi-province GST/HST applied correctly

3. CRA issues a Proposed Audit Adjustment.

4. Mackisen CPA prepares complete legal + documentary defense.

Learning insight: CRA rebuilds the year using care schedules, text messages, e-transfers & timesheets.

Mackisen CPA’s PSW/Home-Care Audit Defense Strategy

• build a Care-Service Tax Matrix (taxable PSW vs exempt nursing)
• reconstruct missing invoices with compliant GST/HST
• validate subcontractor GST registration
• rebuild ITC binder (vehicle, PPE, equipment, software)
• defend mileage & home-office allocations
• reconcile timesheets → invoices → deposits → GST filings
• verify any nursing exemptions using regulated-practitioner proof
• rebuild imported-equipment self-assessment entries
• prepare CPA-certified CRA audit binder
• negotiate penalty + interest relief

Learning insight: Home-care audits are won through precise service classification + perfect logs + ITC discipline.

Common CRA Findings in PSW & Companion-Care Audits

• services incorrectly treated as exempt “healthcare”
• GST/HST not charged on personal support
• subcontractor invoices invalid
• ITCs denied due to insufficient receipts
• vehicle expenses overclaimed
• imported devices missing GST self-assessment
• cash/e-transfer payments unreported
• travel fees not taxed

Learning insight: Largest reassessments arise from incorrect exemption claims + missing invoices + inconsistent logs.

Real-World Results

• A PSW agency avoided a $221,000 reassessment after Mackisen CPA re-classified services & rebuilt subcontractor documentation.
• A companion-care provider reversed a $112,000 ITC denial via complete PPE & mileage documentation.
• A home-care business eliminated penalties by correcting all GST/HST charges on weekly schedules.
• A hybrid PSW/cleaning service cleared CRA findings through deposit→invoice→log reconciliation.

Learning insight: CRA backs down when classification, logs and receipts are CPA-organized and defensible.

SEO Optimization & Educational Value

Primary keywords: GST/HST PSW audit, CRA home-care audit, taxable vs exempt healthcare services Canada, Mackisen CPA Montreal
Secondary keywords: companion care GST, ITC denial home care, subcontract PSW audit, senior-care GST rules

Learning insight: This topic drives extremely high SEO traffic due to confusion between medical and non-medical services.

Why Mackisen CPA Montreal

With 35+ years defending PSWs, home-care companies, senior-care agencies and non-medical support workers, Mackisen CPA Montreal is Québec’s #1 expert in GST/HST home-care audits.

We understand service classification, subcontractor issues, ITC allocation, mileage rules and CRA audit methodology deeply.

Learning insight: Home-care audits require classification accuracy, documentation discipline, subcontractor compliance & ITC control — all strengths of Mackisen CPA.

Call to Action

If CRA is auditing your PSW service, companion-care business, home-care agency or non-medical support operation, contact Mackisen CPA Montreal immediately:

📞 514-276-0808
📧 info@mackisen.com
🌐 mackisen.com

Learning Conclusion:

A CRA GST/HST PSW & Non-Medical Home-Care Audit tests service classification, subcontractor GST compliance, ITC documentation, mileage accuracy & deposit reconciliation.
Mackisen CPA Montreal ensures full protection from reassessments.