The Disability Tax Credit (DTC) was broken down in the prior two articles (Click here for Part 1 or Click here for Part 2) and continues here.
Canada Revenue Agency (CRA) allows mental functions to also be covered under the DTC. This must affect everyday life, and even with therapy, medication, and devices you must meet both of the following criteria:
- Unable or taking an inordinate amount of time to perform by yourself and
- That this is the case at least 90% of the time.
Typical mental functions range from:
- Adaptive functions (health, safety, social interactions and handling simple transactions such as grocery shopping or paying a bill).
- Memory including the ability to remember simple transactions, basic personal info (date of birth, address etc.).
- Judgement, problem-solving and goal-setting such as being able to follow prescribed treatments or selecting weather-appropriate clothing.
Except for Life-Sustaining therapy (note below), you must meet two or more of the previously mentioned disabilities (visit PennyDimeDollar.com for the complete list). Here is a couple of examples:
- Gerry can walk one block, but then must take time to recuperate. He can carry out the mental functions necessary for everyday life but can concentrate on any topic for only a short period of time.
- Maria always takes a long time for walking and dressing,
- Steven always takes a long time in dressing and feeding.
The last category of the DTC is Life-sustaining therapy. In order to be eligible, the therapy is needed:
- to support a vital function, even if it eases the symptoms and;
- at least three times per week and;
- for an average of at least 14 hours per week.
Examples could be checking blood glucose levels, preparing, and administering insulin etc. Examples that are not covered are the time a device delivers therapy, activities related to exercising, travel time to and attending therapy or appointments or shopping for medication.
The DTC benefits do not stop with the tax credit (which is transferable). It also opens up the Registered Disability Savings Plan or RDSP (a long-term savings plan in which the government can match up to $2 for every $1 contributed – maximum benefit up to $3,500 annually), and the connect Canada Disability Savings Bond (up to $1,000 per year to qualified DTC applicants). Local Banks can assist in the setup of this valuable benefit to those who are under 60 years of age.
If you remember back to the first article on the DTC, the steps are straightforward. Continue by:
- First off, get the T2201 Disability Tax Form:
- Complete the top of the form. Your name, social insurance number, address etc., that is all!
- Take the DTC application form to your doctor or specialist who has the highest level of medical knowledge of your disability. This medical professional will complete the remaining portions of the form and then return it to you. Most medical professionals will charge a small fee ($10-50) but alas this is eligible as a medical expense on your upcoming tax return.
- Upload to Canada Revenue Agency (CRA) or mail to the CRA.
- If you have access to your online Canada Revenue Agency account, upload the form (look for T2201 or Disability Tax Form submission) or;
- Contact your local accountant or tax provider to inquire about submission through the Represent a Client (RAC) system.
- Click here to submit the form to Andre Choquette who will arrange to submit it to CRA (will require authorization through the use of the Represent a Client (RAC) system.
- Mail (with tracking option) to Canada Revenue Agency at:
- Alberta, British Columbia, London, Manitoba, Northwest Territories, Regina, Saskatoon, Thunder Bay, Windsor, or Yukon regions, send to Canada Revenue Agency – Winnipeg Tax Centre 66 Stapon Road Winnipeg MB R3C 3M2
- Barrie, Kingston, New Brunswick, Newfoundland and Labrador, Nova Scotia, Peterborough,
St. Catharines, Sudbury (the area of Sudbury/Nickel Belt only), Toronto Centre, Toronto East, Toronto North, or Toronto West regions, send to Canada Revenue Agency – Sudbury Tax Centre P.O. Box 20000, Station A Sudbury ON P3A 5C1 - Laval, Montréal, Nunavut, Ottawa, Rouyn-Noranda, Sherbrooke, or Sudbury (other than the Sudbury/Nickel Belt area) regions, send to Canada Revenue Agency – Shawinigan-Sud Tax Centre 4695 Shawinigan-Sud Blvd Shawinigan QC G9P 5H9
- Chicoutimi, Montérégie-Rive-Sud, Outaouais, Québec, Rimouski, or Trois-Rivières regions, send to Canada Revenue Agency – Jonquière Tax Centre 2251 René-Lévesque Blvd Jonquière QC G7S 5J2
- Belleville, Hamilton, Kitchener/Waterloo, or Prince Edward Island regions, send to Canada Revenue Agency – Prince Edward Island Tax Centre 275 Pope Road Summerside PE C1N 6A2
- International and Ottawa Tax Services Office (deemed residents, non-residents, and new or returning residents of Canada), send to Canada Revenue Agency – International and Ottawa Tax Services Office P.O. Box 9769, Station T Ottawa ON K1G 3Y4 CANADA
- . And please stay away from the many predatory websites that will expect to take a huge percentage of your DTC, trying to make it look complicated.
Andre Choquette is an accountant in public practice and an author of over 30 books through Prentice Hall and other publishers. He is also a software developer of software apps and websites. Andre resides with his wife Wanda at Christina Lake.