It’s very common for people who live with a disability to do so without seeking any financial support. We have found that people are simply not aware of the various credits, programs or support they may be eligible for. The Disability Tax Credit is one of many credits that work to reduce the income tax for individuals with physical or mental impairments that they or their supporting family members may be required to pay come tax season. Read on for a summary of what you need to know before applying for the Disability Tax Credit!
What is the Disability Tax Credit?
The Disability Tax Credit (DTC) is often underestimated or ignored despite it being classified as a major credit. Ontarians tend to use this credit less (per capita) in comparison to most other provinces and territories in Canada.
Now, the Government of Canada has made it easier than ever to complete the application in order to receive the credit.
There is a new app that doctors can use to assess and certify the effects of an impairment. This is a lot better than the old system. There are now only three steps in getting the DTC- getting certified, applying for the credit, and claiming it on your tax return!
Do I qualify?
It’s always good to talk to your doctor or practitioner if you are unsure about your status for qualification as they may have seen similar situations to yours in the past and have more insight on if you would qualify for the tax credit.
However, some good things to keep in mind if you are trying to figure out if you qualify or not are the categories for impairments that the government lists: walking, mental function, dressing, feeding, eliminating, hearing, speaking, vision, and life-sustaining therapy.
Being eligible for the DTC means that a medical professional can certify that you have a severe or prolonged impairment in one of the listed categories, have significant limitations in two or more of the listed categories, or receive therapy that is life-sustaining.
Remember: it is always good to check with your doctor as the eligibility is something that can be updated to have new categories on the list. For example, invisible disabilities (mental) and Type 1 diabetes are relatively new additions to meeting the requirements.
How to Apply?
Visit the Government of Canada website for the full details on how to apply and direct links to the application for you to download or fill out and submit.
The first step involves getting your impairment checked out and certified by a doctor or other qualified medical professional. Depending on the impairment, a specialist may be able to provide the certification. For example, if you have a hearing impairment, you’re able to go see an audiologist for the certification. It’s also good to remember that there are fee limits in regard to what medical professionals can charge you to get the certification.
The next step is to fill out the application. You can fill out the application in a digital or paper format and there are two sections to complete. Your medical professional will fill out their designated section and you’ll fill out the individual’s designated section. Whichever format you use to fill out the forms, make sure you’re keeping a copy for yourself to have on hand for easy reference.
The final step in applying is to submit your application. There are two ways you can submit. You can submit online using the CRA’s My Account or you can submit your application by mail to one of the 3 approved tax centres listed on the Government’s website.
After you apply, the government will then review your application and decide on whether or not to approve it! Be sure to submit your application before you submit your tax return so that there isn’t a delay in the review of your case.
Why Should I Make Use of the Credit?
It can be a hassle to apply for extra credits on top of filing your taxes if you find yourself stretched thin for time but it’s definitely worth the time as there are several potential benefits for you and your family.
The credit could really help your “dependent” financially and it could result in credits for you as well if they can’t use them. By applying for the DTC you are completing step one in the process of unlocking other credits/tax advantages that could save you and your family on medical expenses. Furthermore, you can automatically go back and reassess prior tax returns if you’re eligible.
There are many different tax credits that are designed to help you and it can be a challenge to keep track of them all or know which one is right for you. We hope the information here has provided you with some insight into the Disability Tax Credit so that you and your family can get the financial support you may have been looking for when it comes to medical expenses.
Are you a small business owner and wondering if you or someone in your family qualifies for the Disability Tax Credit? Still unsure if applying would be helpful to you? At UpSide Accounting, we are here to help you figure that all out. If you need help understanding your eligibility or navigating your taxes this season and would like to explore working with us, contact us here. We are here to help!