Have you or your child been denied the Disability Tax Credit (DTC)? Were you discouraged from applying? Or did you try to apply but get lost in the process?
If so, you’re not alone. The DTC application process can be both challenging and confusing, leading many to give up or mistakenly believe they are ineligible. But don’t give up just yet -– we're here to help you understand the DTC process, reapply, and potentially gain access to life-changing benefits for your child.
7 Good Reasons to Give the DTC a Second Shot
The Disability Tax Credit delivers crucial financial support for individuals with disabilities and their families. If you’re approved, you could access the following benefits:
1. Significant Tax Savings
The DTC is a non-refundable tax credit that can reduce your income tax, allowing you to hold onto more of your hard-earned money instead of paying it out in taxes. Many families use this saved cash for essential expenses and to create more wiggle room in their budget, enabling them to provide a better quality of life for their loved ones. Imagine the peace of mind that comes with getting a break on your taxes each year.
2. Retroactive Refunds – A Welcome Financial Boost
One of the lesser-known benefits of the DTC is the ability to apply it retroactively for up to ten years. If you're approved, you could be eligible for a large tax refund for previous years where you paid more than you owed. This can result in a big lump sum you can use to pay off debt, make necessary home modifications, or simply save as a financial cushion. For many families, this retroactive payment can be a game-changer, helping them to catch up or get ahead.
3. Access to the Canada Disability Benefit – $200 Per Month
Starting in September next year, individuals who are approved for the DTC will also be eligible for the Canada Disability Benefit – an additional $200 per month. This benefit is meant to provide extra support to individuals living with disabilities, helping to cover everyday costs such as:
- Medical expenses
- Specialized equipment
- Other essentials that improve quality of life.
This monthly benefit acts as a consistent financial resource you can rely on.
4. Additional Savings Through the Child Disability Benefit
If your child is approved for the DTC, you may also be eligible for the Child Disability Benefit, which provides a tax-free monthly payment to help support families raising children with disabilities. For July 2024 to June 2025, the max monthly payment is $276.83 per month. The amount you’ll receive depends on your income and how many eligible children you care for.
These funds can help cover the unique costs associated with raising a child with special needs, from therapy to specialized programs to non-covered medical expenses and more. This support can make a significant difference in ensuring your child has access to the care and opportunities they deserve.
5. Registered Disability Savings Plan (RDSP) Access
Once you’re approved for the DTC, you become eligible to open a Registered Disability Savings Plan (RDSP). An RDSP is a long-term savings plan designed to help individuals with disabilities and their families save for the future. The government may also contribute through matching grants and bonds, making this a powerful tool for building financial security.
6. Future Financial Security with Preferred Beneficiary Election and QDT Election
Beyond immediate benefits, the DTC also opens up important planning opportunities for the future. For example, when the parent of a DTC-approved child passes away, their estate can make use of what's known as the preferred beneficiary election and the Qualified Disability Trust (QDT) election.
These options help minimize the taxes paid on any inheritance and ensure that more money goes directly to supporting the person with the disability. Though the technical details can get complex, the important thing to know is that these options provide long-term financial security, helping protect your loved one’s future.
7. Unlock Other Provincial and Federal Benefits
Being approved for the DTC can also unlock additional provincial and federal benefits that are otherwise inaccessible. Many programs use DTC eligibility as a qualifying factor, meaning that once you're approved, you may also qualify for other forms of support, including but not limited to:
- Provincial disability benefits
- Home renovation grants
- Subsidized transit passes
Approval for the DTC can act as the key to accessing a wide range of other programs designed to improve quality of life.
Why Do People Get Turned Down for the Disability Tax Credit?
Applying for the DTC is no walk in the park, especially when you go it alone. It involves:
- Completing the T2201 Form: A doctor must complete this form correctly, detailing the impact of the disability. This step is crucial, as even a small error can lead to rejection.
- Approval from the Canada Revenue Agency (CRA): Once submitted, the CRA reviews the application. If there are discrepancies or insufficient information, they may deny the claim.
Here are some other reasons people don’t get approved for the DTC:
- Insufficient medical information
- Unmet eligibility criteria (severe, prolonged impairment)
- Errors or incomplete application
- Lack of medical practitioner support
- Impairment duration not clearly demonstrated (must be 12+ months)
- Insufficient evidence of significant restrictions on daily living
These hurdles can be discouraging for applicants, especially if they’ve tried and failed before. But often, reapplying with the right support can make all the difference.
We Can Help You Successfully Reapply for the DTC
In just one easy consultation, we’ll take a close look at your situation and assess whether it's worth pursuing the Disability Tax Credit again. Our experienced team will guide you through the entire process, pinpoint any past issues, and give you a clear estimation of your chances.
Whether you’ve been denied before or just need a second opinion, we’ll help you understand your options and make the process as smooth as possible.
Here's What You Could Receive If You Succeed With Your Reapplication:
- Significant tax relief that could save you thousands of dollars
- A retroactive refund for past taxes paid
- Monthly financial support through the Canada Disability Benefit
- Access to the Child Disability Benefit for families
- A Registered Disability Savings Plan to secure your future
- Opportunities for long-term financial planning for your loved ones
- Access to a range of additional federal and provincial benefits
Take the first step today!
Don't let the complexity of the DTC application process hold you back from getting the support you deserve. Navigating the forms, gathering medical evidence, and understanding the criteria can feel overwhelming—but that's where we come in.
Our team is here to simplify every step, guiding you through the process with expert advice and hands-on assistance. We'll make sure you have everything you need to maximize your chances of success and claim all the benefits you're entitled to.
Fill out our Family Evaluation Form. We’ll help you determine if a consultation with Karen Christy is the appropriate next step. Karen can assess whether a DTC reapplication is worthwhile and provide tailored guidance for your situation.
Want to skip the form and set up a consultation with Karen directly? Reach out to generose@kpopelaw.ca.