Disability tax credit

Making the most of the federal government's disability tax credit.

If you or someone in your family has a disability, you already know what a profound impact it can have on your quality of life and your finances.

Family support is always vital, of course, and there are programs and organizations that can also provide help and support, but anything that can be done to reduce the additional financial costs of a disability is always welcome. The federal government provides tax relief for those with certain types of physical or mental impairments through the non-refundable Disability Amount Tax Credit (DTC).

The tax relief can be significant and ongoing but many people don’t even know they qualify for the DTC, or that if they have missed claiming it in the past, they may be able to seek adjustments and reclaim those missed opportunities. Here is some basic info to be sure the DTC will work for you.

To be eligible for the DTC you must complete Canada Revenue Agency (CRA) form T2201.

A qualified person – usually your doctor – must certify that you have a severe and prolonged mental or physical impairment that markedly restricts the ability to perform the basic activities of daily living. If you are receiving extensive, life-sustaining therapy, you may also be eligible for the DTC, under certain conditions.

Once approved, you may claim the disability amount on your income tax return.

If all or part of the disability amount is not claimed by the taxpayer with the disability (who is also a dependent), it can be transferred to a spouse or common-law partner or another supporting taxpayer, who may also be able to claim the Caregiver Amount Tax Credit.

The DTC can also be a qualifier for obtaining other tax breaks, such as for certain medical expenses.

If you have missed claiming the DTC in past years, you can seek adjustments to your previous returns for up to ten years through the CRA’s Fairness Policy. If you want the CRA to reassess a tax year and allow a claim for the DTC, you must either submit CRA Form T1ADJ or send a letter of request, with details, to the CRA. You must also obtain the support of a medical practitioner who certifies that the impairment existed during the previous tax years.

It can be very complex to get the most from the DTC, especially when it comes to the interrelationships with other financial provisions for a disabled person. That’s why a discussion of the issues with your professional advisor is always a good idea.

Andy Erickson is the division director with Investors Group, Vernon. This article is provided for information purposes only. Please consult with a professional advisor before implementing a strategy.

Just Posted

Vernon organization aiming to help teens at Christmas

Teens Count Too will be making gift presentations this week but is still accepting cash donations

For 52 people, it really is home for the holidays in Vernon

New My Place residential facility has occupants celebrating holidays in stable environment

Vernon community radio station inching closer to going on-air

Application to be put on public hearing agenda, likely in the spring.

Penticton Vees earn split with Vernon Vipers

Vees victorious 4-1 at home in back end of home-and-home series

North Okanagan Knights blanked in East Kootenays

Knights drop pair of KIJHL games in Fernie and Kimberley; lost five straight

VIDEO: Success of wildlife corridors in Banff National Park has advocates wanting more

Demand for more highway protection escalated after seven elk were killed by a semi-trailer near Canmore

In Photos: CP Rail Holiday Train lights up the Shuswap

The stop on the train’s Canada-wide journey came with a $5,500 donation to local food bank.

B.C. VIEWS: Hunger does not end with the season

Despite innovations in food distribution, the need is still there in B.C. communities

Kelowna RCMP officer suspended after allegedly sexting assault victim

RCMP confirm investigation but hold back details

Old Christmas card has ties to Summerland agriculture

Card was sent by former director of Summerland Research Station

Sharks beat Canucks 4-2 to snap 6-game skid

Vancouver visits Vegas on Sunday

Fans sing Canadian anthem after sound system breaks at BMW IBSF World Cup

The Canadians in attendance made sure their team and flag were honoured on the podium

Prince George RCMP use bait packages to catch porch pirates over the holidays

First-in-Canada program with Amazon looks to combat parcel theft

WATCH: Fire destroys Big White Ski Resort chalet

Social media eulogies peg the property, nicknamed “The Pharamacy,” as both loved and hated

Most Read