Federal Disability Tax Credit

What Is Disability Tax Credit?

If you think you are suffering from any kind of disability as laid down in the Income Tax Rules you should avail of this tax credit. This is a tax credit for tax payers who are disabled. Disability is defined as severe and prolonged physical or mental impairment. You could be entitled to a huge Federal tax credit of $7,899 which means a tax savings of 15% of $7,899=$1,184.85.

Disability Defined:

Severe and prolonged is defined as disability which is expected to last for at least for 12 months from the date of its onset. It requires you to obtain the certificate of disability in the prescribed Form T2201-Disability Tax Credit Certificate from the registered Doctor or any other professional who is authorized to certify the disability. Some of the other professionals who could certify your disability are Optometrist for vision, speech language pathologist for speaking, Audiologist for hearing, Occupational therapist or physiotherapist for walking etc. Disability definition requires that your ability to perform the “Basic Daily Living Activity” should be markedly restricted. People who are undergoing the therapy (e.g. Dialysis) for an average of 14 hours or more per week to keep the vital body functions intact are eligible for this tax credit.

How to Claim it For the First time:

When you want to claim your disability for the very first time, the rules require that a paper tax return needs to be sent while claiming the Disability tax Credit for the first time. This means that such tax returns cannot be efiled or Netfiled for the first time. It takes around 8 to 12 weeks’ time for Canada Revenue Agency (CRA) to ascertain whether the disability tax credit should be allowed or not. CRA reserves its right to ask further questions to determine your disability credit.

Can Disability Tax Credit be transferred?

Yes, if your disability tax credit is not fully utilized, the same can be transferred to your parents, grandparents, child, grand child, spouse, sibling, uncle, aunt, niece or nephew.

How far back can you claim the Disability tax Credit?

The year for which this tax credit can be claimed depends on the year mentioned in T2201 Certificate. Ideally, you can go back to last 10 years and revise the tax returns for those years. When this tax credit is claimed, lots of tax refund comes back to the taxpayers.

Additional Supplement for a Disabled Child under 18 years of Age:

When the child under 18 years of age is disabled, an additional supplemental tax credit of $4,607 is allowed and the same can be transferred if the disabled child does not have the enough income to fully utilize this tax credit.

Disclaimer: Any discussion on this blog relating to tax matters is purely for educational purposes and not taking any specific actions based the general tax rules described therein. Your tax situation could be different and as a result there may be different tax strategies applicable under individual cases. We do not claim the tax situations described above to be exhaustive or conclusive. In case of any specific tax situations or problems, you are advised to seek professional advice.