The world is filled with unfair opportunities and less-than-ideal situations, but the Canadian government continues to find ways to even out the playing field. Several programs and services are available for those living with disabilities, for example, as this helps them cope with added expenses due to their conditions. At the same time, this allows them to still fully participate as citizens, which includes the Disability Tax Credit (DTC).
In order to be eligible for the DTC, one must suffer from severe and prolonged impairment in physical or mental functions, which is present all or substantially all of the time (at least 90% of the time), and that has lasted or is expected to last for a continuous period of at least 12 months.
Claiming the disability tax credit is one of the best ways to receive some financial relief for all of the additional medical costs that can come along with longstanding medical issues. In 2020, this can provide individual taxpayers with tax relief of up to $1,970 (for Ontario residents).
To help you fully understand how the Disability Tax Credit (DTC) works, here is a quick and easy guide for you:
What types of conditions qualify for the Disability Tax Credit?
Although the CRA recognizes that disabilities come in various forms, it pays to know what kind of conditions are now being supported. Eligibility is based on the effects of the individual’s impairment, which is required to fall into one or more of the following categories:
- Basic activities involved in daily living:
- Eliminating (bowel or bladder functions)
- Mental functions necessary for everyday living
- Life-sustaining therapy
- The cumulative effect of significant restrictions in two or more of the basic activities of daily living, or in vision and one or more of the basic activities of living
Eligibility is not based on the medical condition except where the person is blind. If you are unsure of your eligibility, reach out to a tax professional and they can help you determine potential eligibility.
How do I apply for the Disability Tax Credit?
To qualify for the DTC, you must have the following requirements on-hand:
- Form T2201 (Disability Tax Credit Certificate):
This form should be completed by a medical professional familiar with your personal circumstances and be filed with, and approved by the CRA before any claims can be made. Upon approval by the CRA, the taxpayer will be notified of exactly what years they will be eligible to claim the DTC.
Breaking The Stigma: No Need To Fear The Label
Most people fear receiving the Disability Tax Credit due to the stigmas involved. This leads to avoidance, thereby preventing individuals from enjoying benefits rightfully theirs. If you’re considering getting the DTC, but afraid of people finding out about your conditions, there will be no need to fear.
Claims and benefits obtained from this program will strictly remain confidential. The Canada Revenue Agency (CRA) is tasked with keeping your private information safe, ensuring that all your transactions remain safe from public disclosure. Your medical practitioner and family members will be part of the little bubble as well, so you can rest assured that your information will remain confidential.
Moreover, it’s also important to understand that the DTC will never formally label you as disabled. There is no formal designation to label an individual, as you are not your disability. Getting approved for the Disability Tax Credit only means that you qualify for the benefits offered, including tax reduction.
If you wish to learn more about Disability Tax Credit in Canada, Blueprint Accounting Inc. would be happy to assist. We are a cloud accounting firm based in Ottawa, serving clients all across Canada. We handle small business bookkeeping, accounting, and tax planning for our clients, and we’d be happy to help you with your accounting and tax-related matters. Contact us today to learn more.