Application Process of Disability Tax Credit for Amputation

January 21, 2014 by dccinc

The Disability Tax Credit (DTC) provides tax credits that are available for any adult or child who has an impairment in mental functioning or physical disability that is serious and expected to last at least a year (or to be permanent). Since an amputation is a permanent condition, any amputee should consider applying for a tax credit program. But, first, you must go through a simple process to become eligible. In order to be found eligible for a The Disability Tax Credit (DTC), The Disability Tax Credit Application needs to be completed by a qualified practitioner such as a medical doctor or specialist in a medical or mental health field. You can read our Disability Tax Credit Guide to find out more about the application process.

The Disability Tax Credit (DTC) is a non-refundable tax credit offered to Canadian citizens who have been determined to have a disability. The Disability Tax Credit reduces the amount of tax payable on one’s income tax and benefit returns. It also provides a yearly supplement for children under the age of 18.

In order to be eligible for the Disability Tax Credit, one must complete the Disability Tax Credit Application. This form can be found on the Canada Revenue Agency (CRA) website. The Disability Tax Credit Application is for a person who has:

  1. A severe physical or mental functioning impairment.
  2. The impairment is expected to last for at least 12 months.
  3. The impairment affects the person’s ability to function normally in a significant way.
  4. A qualified practitioner asserts that the impairment meets criteria.

Thus, it first must be determined by a medical professional, in this case, that having an amputation qualifies an amputee as disabled in order for that person to be eligible for the Disability Tax Credit.

Since The Disability Tax Credit Application is for persons with a severe physical impairment or impairment with mental functioning that is either permanent or expected to last a long time, it would stand to reason that an amputation would qualify. However, it must also be determined that having a specific amputation involves severe impairment of functioning. This impairment must be certified by a qualified practitioner using the Disability Tax Credit Certificate (T2201). The Canada Revenue Agency must then validate the certificate in order for a person to be eligible to receive the Disability Tax Credit. If you are 18 or older by the end of the year for filing, and you have been accepted for the Disability Tax credit, you can claim $7,546 as the Disability Tax Credit Amount available to you, tax free on your taxes.

Children under the age of 18 are eligible for the Child Disability Tax Credit. If accepted for the Disability Tax Credit, a child is also eligible for the Child Disability Tax Benefit. A parent and qualified practitioner must complete the Disability Tax Credit Certificate (T2201) for a child to be eligible for the Canada Child Tax Benefit (CCTB). The Child Disability Benefit (CDB) can amount to up to $2,626 tax-free if the child is found to be eligible. Further, a child who is eligible for the Disability Tax Credit can have $4,402 claimed as a tax credit if the child is under 18 by the end of the year, and also can have up to $7,546 claimed for further tax credit as well. However, this last amount could be reduced if there were other tax claims for child care and/or attendant care. For more information, you can download our Child Disability Tax Credit Guide. 

A child who is being raised by an agency, or in some form of institutional care is also eligible for the Children’s Special Allowances (CSA) program. This program provides monthly supplements of $304.50 for the 2013 – 2014 fiscal year for children who are:

  • Under the age of 18 by the end of the year.
  • Canadian citizens living in Canada.
  • In the care of an agency (institution, foster care, group home, etc.).In order to be eligible for the Disability Tax Credit, an adult or child needs to be found impaired on:
  • At least two measures of activities of daily living (ADL’s) such as walking, talking, dressing, feeding oneself.
  • Be found to have a cumulative effect of significant restrictions in one’s life by a qualified practitioner, and/or require life sustaining therapy with impairment being determined by a qualified practitioner (which could be a medical doctor, Psychologist, speech therapist, etc.) and is measured by how much a person’s disability impairs their ability to function normally.
  • Significant impairment would indicate that the individual’s disability is evident 90% or more of the time and that the disabled person must take three times the amount of time to do at least two of the activities of daily living.The Canada Revenue Agency (CRA) also provides various opportunities to save for the future (which is a necessary step for anyone with a significant impairment, such as the amputee).

Should you participate in a savings plan delivered by the CRA? The Registered Disability Savings Plan (RDSP) helps parents and others caring for the disabled to provide some financial security for those with a long term severe disability. The RDSP is open to anyone who:

  • Is a Canadian citizen
  • Is under the age of 60
  • Has a social insurance number Both parents and legal guardians can open up an RDSP for a disabled child. The RDSP has a lifetime limit of $200,000 but has no annual limit. The Canadian Government could also contribute a Canadian Disability Savings Grant of up to $3,500 a year and/or a Canadian Disability Savings Bond of up to $1,000 a year for low and modest income homes.

The Time Is Now!

If you intend to apply for these valuable benefits, you need to apply as soon as possible. This is especially true if you are going to turn 18 in the near future. Plan ahead and take advantages of theses benefits. The Disability Tax Credit and The Child Disability Tax Credit are both excellent government programs that can help you or your family to weather difficult times. Take the first step and visit the Canada Revenue Agency website for more information.

We can help amputees with their disability tax credit application process. call us now.

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