tax related

The disability tax credit (DTC)?

The DTC helps those with a disability or anyone caring for someone with a disability by reducing the amount of taxes they may owe. If the individual is under the age of 18 there is an additional supplement. Note, this is non-refundable tax credit meaning it can reduce the income tax they may have to pay but you won’t get anything back. Being eligible for the DTC can open the door to other federal, provincial, or territorial programs such as the registered disability savings plan, the working income tax benefit, and the child disability benefit.

Who is eligible for the DTC?

To be eligible, a person must have a severe and prolonged impairment in physical or mental functions. Don’t think about it in terms of your autism diagnosis but rather the effects that the impairment has on the person.

The person must meet one of the following criteria:

  • is blind
  • is markedly restricted in the basics of daily living such as speaking, hearing, walking, eliminating (bowel or bladder), feeding, dressing, or mental functions necessary for everyday living
  • is significantly restricted in two or more or the basic activities of daily living. Think of this as combinations of restrictions. If you have one severe and prolonged impairment or a combination of restrictions that add up to what the CRA calls a marked restriction. These significant restrictions have to exist together at least 90% of the time.
  • needs life-sustaining therapy

In addition, the person’s impairment must meet all of the following:

  • is prolonged, which means the impairment has lasted, or is expected to last for a continuous period of at least 12 months
  • is present all or substantially all the time (at least 90% of the time)

You are eligible for the DTC only if CRA approves Form T2201, Disability Tax Credit Certificate. The form can be found online by a quick search. There are two parts to the form. Part A is basic information and part B requires a qualified practitioner to fill out. A medical practitioner has to fill out and certify that you have a severe and prolonged impairment and must describe its effects.

After the form is filled you send it to CRA for review. There is no timeframe but on average it can take 4-10 weeks. If the form is not filled out completely or if the CRA requires further explanation from medical practitioner, then they sent out a questionnaire and you get notified by mail that they require additional information. Regardless of the outcome, CRA will send you a letter letting you know if you’re eligible and if not why was your request not accepted. You can also find this information online by signing up for the CRA’s electronic service call My Account. You only need to fill and submit this form once unless your condition improves or if

CRA ask for another one. The notice of determination will show which year(s) you are eligible for the DTC. When your eligibility is about to expire, CRA will notify you one year in advance as well as in the year it expires.

For more information about the DTC, you call CRA at 1-800-959-8281, between the hours of 9:00 a.m. and 5:00 p.m., Eastern Standard Time.

Eligibility

The CRA’s decision is based on the information the medical practitioner provided. So, if you have more information from the medical practitioner that the CRA didn’t have in their first review of the form, the CRA encourages you to write to your tax centre and ask the Disability Tax Credit Unit to review your file a second time. Include any relevant medical information that you have not already sent to the CRA, such as medical reports or a letter from a medical practitioner, describing how the impairment affects the activities of daily living. If after all that CRA says you are still not eligible, you can file an objection to appeal the decision. The time limit for filing an objection is 90 days after the day the CRA sends you the letter telling you that your request was not accepted. For those who are tech savvy you can also file an objection online using My Account.

Amount

To claim the disability amount for yourself, line 316.

To claim the disability amount for your dependent, line 318.

To claim the disability amount for your spouse or common-law partner, line 326.

Line 316 is where you can claim this amount. the disability amount can be transferred between spouses or common-law partners on line 326 of Schedule 1 of the income tax and benefit return. You can make a claim for a dependent who qualifies for the disability amount on line 318 of the income tax and benefit return. A dependent can be your or your spouse’s or common-law partner’s child, grandchild, brother, sister, niece, nephew, aunt, uncle, parent, or grandparent. CRA can look at your tax returns for the previous 10 calendar years to include the disability amount. If you ticked “Yes” in Section 3 of Part A to include the disability amount for yourself or your dependent under the age of 18 on your return, the adjustments will be done automatically to all applicable years. f you did not tick “Yes,” you can still ask for a reassessment for previous years. You can send in Form T1-ADJ T1, Adjustment to Request, or a signed letter giving details of your request along with all supporting documents to your tax centre. Or you can use My Account to ask for a change to a return. refund assessment – If your application was approved it will go into assessment process where the CRA checks your retroactive tax situation and calculate the amount of refund you will receive. If you signed up for direct deposit with Canada Revenue Agency, the disability tax credit will be directly deposited into your account. If you are not signed up for direct deposit, they will send you a cheque. In certain circumstances, discussed at  below, the supplemental amount may be reduced. For example, in Ontario, if you are claiming child care expense deduction or a medial expense tax credit then you will see a reduction to your supplement amount.

Federal maximum disability amounts
Year Maximum disability amount Maximum supplement for persons under 18
2017 $8,113 $4,733
2016 $8,001 $4,667
2015 $7,899 $4,607
2014 $7,766 $4,530
2013 $7,697 $4,490
2012 $7,546 $4,402
2011 $7,341 $4,282
2010 $7,239 $4,223
2009 $7,196 $4,198
2008 $7,021 $4,095
2018 8235 4804

Provincial disability tax credit

If you’re eligible for the federal disability tax credit, you’ll also be able to claim the corresponding provincial/territorial tax credit, which will vary based on which province or territory you live in:

If you’re a resident of Québec, you can claim the amount for a severe and prolonged impairment in mental or physical functionsamount (worth $2,625) if you have an approved federal T2201 certificate or TP-752.0.14-V: Certificate Respecting an Impairment. As with the T2201 certificate, your doctor will also need to complete relevant sections of the TP-752.0.14-V form.

How much is the disability tax credit amount?

  • The federal disability tax credit is $8113 for the year 2017. You get an additional supplement of $4733 if the person is under the age of 18. It is calculated at 15%.
  • The provincial amount for disability tax credit depends on individual provinces and is calculated at 10%.
  • Below is the chart which states the provincial disability tax credit amount for the year 2017.
Provincial maximum disability amounts 2017
Province Maximum disability amount Maximum supplement for persons under 18
Alberta $14,417 $10,819
British Columbia $7,656 $4,467
Manitoba $6,180 $3,605
New Brunswick $8,011 $4,673
Newfoundland & Labrador $6,058 $2,851
Northwest Territories $11,579 $4,732
Nova Scotia $7,341 $3,449
Nunavut $13,128 $4,732
Ontario $8,217 $4,793
Prince Edward Island $6,890 $4,019
Saskatchewan $9,464 $9,465
Yukon $8,113 $4,732

 

If you want to claim the DTC for a dependant, you must be named as the person who can claim the disability amount on the dependant’s approved T2201. Keep in mind, your dependant must first claim the disability tax credit on their return. If they don’t need all of the tax credit to reduce their own taxes to zero, they can transfer the remaining amount to you. Check out our article, Disability amount transferred from a dependant for more information.

Similarly, you can transfer your disability tax credit to your spouse or vice versa, as long as the spouse receiving the tax credit is named on the approved T2201 and the transferring spouse doesn’t need to claim the entire amount on their tax return.

Can you get disability tax credit if you have never worked?

DTC is meant to help tax-paying, disabled Canadians and their families offset the cost associated with having a disability. The DTC is a credit for taxes you already paid therefore you must pay federal taxes in order to receive DTC. If you are a minor or you never worked you probably never paid taxes but a family member who supports you or you live with a person (family member, spouse, common-law, friend) who is a tax-paying Canadian and you can prove that they support you then they may claim DTC on their taxes.

Do I file taxes if I get disability tax credit?

Yes, you need to file taxes even if you get a disability tax credit. If you feel unsure, you should consult with the CRA – Canadian Revenue Agency.

Disclaimer: All this information can be found on Government of Canada website under deductions, credit and expenses.

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