The Disability Tax Credit application process for Arthritis

February 16, 2014 by dccinc

Since 2009, the Canadian Disability Tax Credit service has been helping countless Canadian citizens receive thousands of dollars in tax credit that they would have never known about to help cover medical and everyday care costs for persons with disabilities and their caregivers. In the current the current tax year, this service offers a variety of different credit and deduction options; the most prevalent of these credits is the Disability Tax Credit, or Disability amount. This credit can open the floodgates for other credits and deductions for those individuals living with disabilities all over the country.

The Disability Tax Credit is a credit available to citizens of Canada who suffer from severe physical or mental disabilities that show no sign of improvement within the next 12 months. The DTC (Disability Tax Credit) is non-refundable, and can be filed for at any time.

One of the many disabilities eligible for the Disability Tax Credit is the crippling most commonly walking impairment of arthritis. Arthritis affects many more individuals in Canada than you might imagine, and is one of the leading disabilities that qualify for the DTC all over the country. It is reported that over 4.5 million people in Canada suffer from arthritis, and many of them do not take advantage of the Disability Tax Act because they are not informed. Find out about your eligibility if you suffer from Arthritis.

To the surprise of most people, arthritis affects people of all ages, including children all over the country.

  • Children suffering from arthritis – In Canada 1 in every 1,000 children in the nation suffer from arthritis. Every year reported cases of juvenile arthritis increase in the country, and that is why the Disability Tax Act also covers children and their parent and/or caregivers.
  • The Child Disability Tax Credit – is a requirement to qualify children and their parents and/or caregivers for the RDSP (Registered Disability Savings Plan). The RDSP helps families suffering from arthritis get the financial help that they need for medical care and the expenses of everyday care.

The RDSP helps those that suffer from arthritis and other disabilities save for financial security in the future, not unlike a retirement plan. This savings plan is designed to take the stress and worry out of financial security for those that suffer from arthritis all over the country, and can assist in saving for the future through tax sheltering and matched grants from the Provincial or Federal government.

Disability Tax Credit Application

The Disability Tax Credit Application can be obtained from the Canada Revenue Agency by requesting Tax Form T2201. The form comes in two parts, part A and part B, and each part is to be filled out by separate parties.

  • Tax Form T2201 Part A – is to be filled out by the individual requesting the Disability Tax Credit or their parent, caregiver, or legal representative.
  • Tax Form T2201 Part B – is to be completed by a licensed doctor with a specialty in the area of the disability in question. (i.e.: Visual impairment must be completed by a registered optometrist, hearing impairment must be completed by a registered audiologist, etc.)

Approval of Tax Form T2201 is Mandatory For Disability Tax Credit Approval

Once your party and your licensed doctor have completely filled out the Tax Form T2201, it must be sent in to the CRA (Canada Revenue Agency)for approval. Once the Tax Form T2201 has been approved by the CRA, the Disability Tax Credit certificate remains valid for as long as the applying party suffers from his or her disability and does not have to be renewed or re-approved.

If the Disability Tax Credit applicant does not have taxable income, or does not need the full Disability Tax Credit to wipe out owed taxes, the Disability Tax Credit amount can be transferred in part or in full to another person, including a parent, caregiver, legal guardian, or Henson Trust. The recipient of the remainder of the Disability Tax Credit does not have to live with the applicant making the transfer. (This is an extremely relevant fact to cases involving a Henson Trust beneficiary).

  • Disability Tax Credit Amount – When the DTC is not used to bring the taxes to zero to those who receive it, it may be transferred to anyone who has provided basic care to the individual such as food, shelter, clothing, etc. This fact is commonly overlooked by parents and caregivers who think that only those who apply for it can use the DTC.
  • Caregiver Tax Credit Amount – If an individual with a disability, like arthritis, lives with another party who is not their parent or legal guardian for any part of a year, that party is entitled to the Caregiver Tax Credit Amount. This credit cannot be claimed if the dependent was only visiting, it is designed for situations such as group homes and the like.

According to the Canada Revenue Agency (CRA), the amounts of the Disability Tax Credit in the year 2012 broke down as follows:

  • 18 year of age or older received up to $7,546.00
  • Under 18 years of age received up to $7,546.00 with a disabled child supplement of up to $4,402.00

Should a Registered Retirement Savings Plan (RRSP) Rollover be Included in Your Financial Plan?

A 2003 income tax act makes it possible for an RRSP plan to rollover to a dependent survivor, which includes a child or dependent suffering from arthritis. Although this can be a solution to help children suffering from arthritis when they are adults, there are many hurdles to overcome including:

  • Court applications
  • Legal authorization to manage the RRSP
  • Possible termination of any other Provincial or Federal financial assistance

Apply Today To Reap The Full Benefits of The Disability Tax Credit

This tax year has many credits and deductions to help those citizens who suffer from various types of disabilities and impairments, but will do you no good if you do not apply for them. Knowledge is power, and knowing what the Disability Tax Credit has to offer can help you build a financially sound future for you and your loved ones.

We can help arthritis sufferers with their disability tax credit application. call us now!

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