If you are an individual, or if you have a dependant who is suffering from a serious and prolonged mental or actual physical impairment, you may be able to submit a claim for the disability tax credit.
What Is The Disability Tax Credit?
The disability tax credit is a non-refundable tax credit used to reduce income tax payable on your personal tax return of Canadian individuals. A person with a severe and prolonged impairment in physical or mental functions may claim the disability amount once they are eligible for the credit. The credit includes a supplement for persons under 18 years of age at the end of the year. If the individual does not have any taxable income or is unable to utilize the full amount of the credit, they may elect to transfer all or part of the credit to their spouse, common-law partner, or another supporting person.
What Are The Steps For Getting the Credit?
To qualify for this credit, the individual must undergo an examination from a medical professional (or as the CRA terms it a qualified practitioner), and have them complete a T2201 Disability Tax Credit Certificate. Depending on the disability, you may need to see a medical doctor, optometrist, audiologist, occupational therapist, physiotherapist, psychologist, or speech-language pathologist. Once that form is complete, it must be submitted to the CRA for their approval. If they approve it, the individual would be notified in a letter. If the CRA denies the claim, they will send you a notice of determination to explain why your application was denied. You can then consider sending in additional information from a qualified practitioner that was not included on the first review for CRA to review again. If the application is denied again, the individual has the right to file a formal objection to appeal the decision within 90 days of the determination. It is very important to make sure when your qualified practitioner fully understands the form and completes it with all the necessary information. Be sure to disclose as much as possible and the practitioner understands all your issues to reduce the likelihood of rejection.
If the individual is receiving Canada Pension Plan or Quebec Pension Plan disability benefits, workers’ compensation benefits, or other types of disability or insurance benefits, it does not necessarily mean you will be eligible for the credit and you still must have the form completed and an approval from CRA. These programs have other purposes and different criteria, such as an individual’s inability to work.
Once the individual is approved, this credit can continue to be claimed so long as the circumstances do not change. There is no requirement to file a new certificate each year.
What If You Qualified But Never Claimed In Prior Years
If you were eligible for the credit for previous years but did not actually claim the disability amount when you filed your return, you can request adjustments for up to 10 years under the CRA’s Taxpayer Relief Provisions. To claim the disability amount for prior years, you will need to file Form T1-ADJ, T1 Adjustment Request, for each year you need to amend or send a letter containing the details of your request.
http://www.cra-arc.gc.ca/E/pbg/tf/t2201/README.html