Persons with a disability can avail a number of programs and services to meet their financial needs and offer complete participation in the community. Disability Tax Credit is a non-refundable credit that facilitates taxpayers to reduce their income tax payables. There is a special supplement for children below the age of 18 years. Professional tax advisers like disabilitydreams.ca can help you out with the tax credit process. More information on the disability tax credit is available at https://dcmp.org/. A medical professional fills up the T2201 tax form duly signed along with this the Disability Tax Credit Certificate and CRA has to be sent for approval. For non-taxable income, you can transfer the benefits to your spouse or any other supporting partner.
Form T2201 Disability Tax Credit Certificate has to be completed to qualify for non-refundable tax credit. The form seeks information on mental or physical impairments. The information on the year the impairment began. If you want the disability tax credit retroactively, a T1Adj form has to be filed for the previous tax year that the person qualifies. The federal tax credit amount is set at $8,001 for 2016 and a supplement amount of $4,661 for 2016 for under 18 taxpayers. When the taxpayer under the age of 18 crosses the limit of $2,734 for the year 2016, there is a reduction in the supplement. It is completely eliminated when the expenses cross $7,401 for the year 2016.
If the disability amount is left, then it could be used by the spouse or legal partner or even a supporting member who is a tax payer. The disability has to be certified by a qualified doctor stating that the person is suffering from long term or severe disability impacting their physical movement and inability to perform their day to day livelihood activities. Post-2005, the eligibility criteria to qualify for disability amount tax credit for persons with physical and mental impairment was markedly restricted such as the inability in speaking, walking, hearing, feeding, and elimination, dressing or performing mental functions.
Those under extensive therapy are also eligible for disability tax credit if they meet the following conditions.
· sustaining a vital function
· administered to a minimum of 3 times in a week for a duration of not less than 14 hours
· cannot significantly benefit the person not so impaired
The changes made post-2005 clearly define the activities considered for therapy and the time spent on therapy. It mentions the therapy can be determined based on the dosage of medication that needs to be adjusted daily, including even the activities involved in ascertaining the dosage will be part of therapy. Similarly, it does not include activities like diet restriction or exercise, medical appointments, travel time, medicine shopping or post therapy recuperation. The time for therapy has to be dedicated so that the individual takes time off from their normal activities to receive therapy. For children who cannot perform the activities by themselves the time spent by the caregivers for performing the therapy or supervising the child is treated as a dedicated time for therapy.