All About Disability Tax Credit or DTC
Disability Tax Credit or DTC helps in reducing the tax load of disabled individuals as well as the person supporting them. In this guide, we will determine who is eligible for the disability tax credit, how to apply with form T2210and what transpires after sending the form T2210 as well as how to claim and what to do when denied.
What is DTC or Disability Tax Credit
DTC is referred to as Disability Tax Credit. It is a tax credit that is non-refundable that helps neutralize additional expenses for those disabled individuals. It lowers the amount of tax that a person with disability owes as well as their support individuals.
Once you are eligible for DTC, you can claim the amount for disability on your tax return granted that you have a disability. Also, if you’re the supporting person of the disabled person, you may claim it on their behalf. In cases where the disabled person is below 18 years of age, you can assume to endure a supplement on your part.
DTC was introduced by the government to design equality in terms of taxation between taxpayers who are able and those with disabilities. It broadly offers tax relief for the expense of disability, considering that the essential expenses are extra loads that are not perceived by other taxpayers.
How Do I Qualify for Disability Tax Credit Certificate
You can qualify for DTC if you are approved for a DTC certificate by the CRA or Canada Revenue Agency. A Form T2210 will be completed and authenticated by your medical provider. It has to be certified by your medical practitioner that you have a severe and prolonged impairment. Besides, your medical practitioner has to explain the effects and nature of your disability.
Moreover, there are several ways in which you can be qualified for the disability tax credit. The below criteria must be satisfied for you to be eligible:
- Blindness or total visual impairment
- Markedly restricted with at least one activity that is essential to your daily living.
- Significantly restricted with at least two basic daily living activities which may include your vision
- Needing for a life-prolonging therapy or life-sustaining therapy
Other than that, you are should also satisfy the below qualification for your impairment.
- A prolonged impairment that can be justified if the impairment has burdened you for a minimum of 12 months or is identified to last for 12 months as a minimum.
- Your impairment is 90% perceived in all or considerably all the time.
- In cases, where you have been deemed eligible for the disability tax credit, you will no longer send another form T2210 unless you lapse the approval period.
How Do I Apply with Form T2201?
To apply with form T2210, you can download the form and fill out Part A. Your medical practitioner can fill out and certify Part B. After the form is completed, you can submit the form by mail or electronically. Below are the process of what transpires after sending the Form T2210 to the Canada Revenue Agency:
- Your completed and certified Form T2210 is received by the CRA
- The information inputted in your form and provided by your medical practitioner is evaluated and reviewed by the CRA to assess whether you satisfy the DTC criteria. In case they may need further details, CRA will contact you or your medical practitioner.
- You will be informed by the CRA if your application is accepted. A notice of determination will be sent out to you containing the CRA decision and the years that you’re eligible to claim for DTC.
- The final step is to claim DTC on your income tax return based on the years of eligibility.
How Can I Claim the Disability Amount Once DTC Application is Approved
If your DTC application is accepted, you can start to claim the amount on your tax return. If the disabled person will be the one to personally claim the disability amount, it can be done on line 316. If it’s the support person claiming for a dependent, it can be claimed on line 318. But, if your claiming in behalf of your disabled spouse or common-law, your DTC can be claimed on line 326.
Most importantly, if you are qualified for the DTC in the previous years, you can claim for the previous years with 10 years allowable counting back.
What To Do If I Receive Disability Tax Credit Denial Letter?
Going back to what happens after you submit your Form T2210, in step 3, if you get a notice of determination which bears a denied application on DTC, you can do the following:
- Examine the notice of determination and check for the reason why your application was denied. Scrutinize the copy of your Form T2210 and compare it with the reason provided for denial. This is because the CRA based the decision on the report given and filled out by your medical practitioner.
- If you are not satisfied or you disagree with the CRA decision, you can reach out to them at 1-800-959-8281 within Canada and the US.
- Still, if you can find justifiable reasons with what the CRA provided, you can escalate your objection by writing to the CRA with a request to scrutinize your application. You may include associated medical details or certificate that you’ve previously submitted to justify your point.
- As the last step, you can file for a formal objection to their first decision, which can be done within 90 days of receipt of the initial decision indicated in the CRA notice of determination.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.