By Rachel Mills, Manager of Family Support & Independent
Facilitation, NBACL
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.
