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The Disability Tax Credit (DTC)

disability tax credit

 

If you qualify for the Disability Tax Credit and have not been using it, we may be able to recover $16,000.00-$22,000.00 for you by back filing for these credits. Contact Ken Pope for more details.

In my experience, when I have asked parents of children with cognitive and developmental disabilities (which clearly qualified them for the disability tax credit) if they had applied for the credits, 45% answered “no” or “unsure” to this question! The realm of tax credits is one huge area that is often overlooked in terms of helping clients lower their payable income tax, as discussed below in greater detail. In addition to lowering taxes, qualifying for tax credits can also be a requirement for applying for other money-saving vehicles such as the Registered Disability Savings Plan.

To qualify, a person must have a severe and prolonged impairment (expected to last at least 12 months).

The filing process can be onerous, because it requires the involvement of a medical professional and there is sometimes disconnect between how physicians complete forms and how the CRA civil servants process applications at the various centres across the country. For this reason I offer this service of back filing for the Disability tax credit.
Below are the most common questions I hear about the credit.

What is the disability amount?

The disability amount is a tax credit that reduces the amount of income tax people with disabilities, or people supporting them, may have to pay.

Who can claim the disability amount?

If you qualify, you, as a person with a disability, can claim the disability amount on your return. Your spouse or another supporting person may be able to claim the part of the amount that you do not need to use to reduce your federal income tax to zero.

If you or anyone else paid for an attendant or for care in a nursing home or other institution because of your impairment, it may be more beneficial to claim the amounts paid as medical expenses instead of the disability amount. In some circumstances, both amounts may be claimed.

Claiming the disability amount for yourself.

You should use Form T2201, Disability Tax Credit Certificate, to claim the disability amount. If you were allowed the disability amount last year, and you still meet the eligibility requirements this year, you can claim the amount this year without sending another Form T2201.

Transferring the unused part of the disability amount.

You, as a person with disabilities, may not need all of the disability amount to reduce your federal income tax to zero. In that case, your spouse or supporting person may be able to claim the unused part of the amount.

Generally, a supporting person has to be related to the person with disabilities by blood, marriage, or adoption. For this purpose, you will be considered to be a supporting person related to a person with disabilities if that person is any of the following:

More than one supporting person may make a claim for the same dependant, if there are still unused tax credits. However, the total amount claimed by all supporting persons for that dependant cannot be more than the unused part of the amount.

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