For many families who support a son or daughter with a disability, there are added expenses related to meeting the needs of their family member. One way to offset some of these additional costs is through the Government of Canada’s Disability Tax Credit (DTC). If you are found eligible, you can use the DTC to reduce your taxable income, or can be transferred to an eligible family member.
Accessing the DTC can be a challenging and sometimes intimidating process for people with a disability and their families. This blog will focus on providing tips to help individuals and families when applying for the Disability Tax Credit.
Please note this information is not intended as financial or tax advice.
Tip 1: Prepare for your visit to the doctor
In order to be considered for the Disability Tax Credit, you must have Part B of your application form completed by a qualified practitioner. A full list of professionals who are considered qualified practitioners is included with the application form. When calling to making an appointment with your medical professional, advise them of the purpose of your visit. This will allow them time to prepare for your visit, including reviewing any relevant medical documentation on file related to your disability.
Before visiting your medical professional, it can be helpful to spend time identifying and documenting the areas in which your disability impacts your life. Individuals with a disability and their family members experience the impacts of a disability on a daily basis, while a medical professional may only see a patient for a short time every few months. In order to assist your medical professional to complete your DTC application accurately and thoroughly, it can be helpful to provide them with a written letter detailing the areas of your daily life that are impacted, and provide concrete examples.
The quality of responses provided by your medical profession in DTC application plays an important role when your application is being considered for approval. If your doctor is reluctant to complete a DTC application for you, the written examples you provide can help them see the ways in which your disability impacts your daily life. Your doctor’s role is to confirm the extent and impact of your disability.
Eligibility for the DTC will be determined by the Canada Revenue Agency.
Tip 2: Submit your application as soon as possible
If you are just learning about the Disability Tax Credit, don’t delay, apply now! DTC applications can be reviewed at any time of year. It often takes several months for a decision to be made about approval therefore forms should be submitted as soon as they are completed so processing can begin.
Tip 3: If at first you don’t succeed, try again!
A large number of applications for the Disability Tax Credit are initially declined. Just because your application was not approved the first time, does not mean this decision is final. If your application is declined, you will receive a written notice explaining the reason for the decision. You have the option to provide additional information from a qualified practitioner and have your file reviewed again. You also have the right to file a formal objection to appeal the decision within 90 days of receiving written notification.
Tip 4: If approved, have past tax years reassessed
If you are found eligible for the DTC, it is possible to have your income tax reassessed and adjusted for up to 10 years retroactively from date of approval for years that the disability was present. To request assessment of past tax years, applicants must complete form T1-ADJ T1 Adjustment Request which can be access at: http://www.cra-arc.gc.ca/E/pbg/tf/t1-adj/README.html. A separate form must be completed for each year you wish to have reassessed. This will allow the Canada Revenue Agency to reassess past years and apply the DTC. In some cases, this may result in a rebate being provided to the individual or eligible family member.
In addition to the significant tax savings that can result from accessing the Disability Tax Credit, the DTC also opens doors to other financial savings for people with a disability such as Registered Disability Savings Plans (RDSPs).
The application form to apply for the Disability Tax Credit is called T2201 and can be accessed on the Canada Revenue Agency’s website at: http://www.cra-arc.gc.ca/E/pbg/tf/t2201/README.html.
If you require assistance with completing your Disability Tax Credit application, you can contact Rachel at:1-506-453-4400, or toll free at 1-866-622-2548.