Disability Tax Credits have long been available for both children and adults living with a disability in Canada. However, it was only in the past few years that children with Attention Deficit Hyperactivity Disorder (ADHD/ADD) have been able to qualify for the tax credit program. Not all children with ADHD will qualify, but a fair number of them now do. Read our guide to get more information about Disability Tax Credits for Children with ADHD.
What Exactly is ADHD?
Attention Deficit Hyperactivity Disorder (known commonly as ADD or ADHD) affects both children and adults, and estimates suggest that at least 300,000 Canadians are diagnosed with ADHD each year. This very common disorder can impede development and impair social function in those affected. Which is why – depending on the individual’s symptoms – they are frequently able to claim the Disability Tax Credit.
Essentially, ADHD interferes with the learning process, impedes social and cognitive development, and can be a precursor to a variety of other conditions. Depending on the patient’s behaviour, ADHD can be put into one of the following three categories:
- Inattention – easily distracted by noise or activity, day dreaming, inability to pay attention to or complete tasks, inability to focus on the person speaking during conversations, impaired self-control
- Hyperactivity – difficulty sitting still, constant fidgeting, talking too much – even when it’s inappropriate, constantly on the go.
- Impulsivity – self-control issues (interrupting others or shouting out answers in a classroom setting), purposely disturbing others, hitting other people, making impulsive decisions.
And on top of being part of one of these three categories, people with ADHD can also suffer from other mental conditions such as anxiety disorders, depression, learning disabilities and behavioural and conduct disorders.
When these conditions cause prolonged impairment and marked restrictions on the child’s day-to-day life activities, the child may be eligible for the Disability Tax Credit. In most of these child cases, ADHD would impede the ability to work or perform in school.
Which Cases of ADHD are Eligible for the Disability Tax Credit?
Because ADHD can vary significantly in its effects on people, it is important to get a proper diagnosis from your child’s general practitioner, or a psychologist if need be. In order to qualify for the Disability Tax Credit, the Canada Revenue Agency (CRA) states that the disability must meet the following requirements:
- The child must have a severe mental or physical impairment.
- The impairment must affect the child 90% or more of the time.
- The impairment must be prolonged (lasting for more than 12 months).
- A medical practitioner must certify that the above is true – in some cases a full medical and psychological exam will take place.
So that being said, it’s really a decision between you, your child and your medical practitioner whether you feel that the above criteria is being met with your child’s particular case of ADHD. It may be in your best interest to see a psychologist who specialises in ADHD because they will be more familiar with the various types of cases – and the severity of not only your own case, but the type of cases that are eligible for the Disability Tax Credit.
Only a medical professional can suggest the proper type of treatment for your child’s ADHD, but most practitioners will recommend a combination of the following:
- Using Ritalin, Adderall or other medications to manage the condition.
- Behavioural counselling to help teach your child how to manage their condition when the medication just isn’t working.
- Routine community care and counselling.
- Overall life and diet changes that help manage the condition.
As a general rule, any type of therapy or counselling that is needed several times per week in order to manage a condition will often increase the chances of being eligible for the tax credit.
Applying for the Disability Tax Credit
If you and your medical practitioner believe that your child fits the requirements, you must together fill out the application Form T2201. As the guardian of the child with a disability, you will be required to fill out the first section of the form which contains personal information about yourself and your child. This will include fairly straightforward information such as names, addresses, birth dates and a social insurance number.
The second part of the form will have to be filled out by your medical practitioner to certify that your child’s case does indeed comply with the aforementioned criteria. Without this section, there is absolutely no chance of receiving the tax credit.
Once you have the form completely filled out and signed by your doctor, you can submit the form to your own accountant when you submit your yearly taxes – or you can submit it to the CRA at any point during the year to ensure you get a timely response. Many times clarification may be required with these types of forms, and you’ll want to have plenty of time to do just that.
Once you’ve been approved for the Disability Tax Credit (DTC), you have the option of asking for tax credits from the previous ten years if you have not yet claimed anything. A simple letter of request sent to the CRA will set the wheels in motion. Once the letter is received, the CRA will calculate the exact amount of credit owed and issue you a check. This process can, however, take approximately 6 months. Learn more about calculating disability tax credit.
Building a Future with RDSPs
If you haven’t heard of Registered Disability Savings Plans, then now is the time to look into them. Once your child is accepted for the DTC, they may also be eligible to start an RDSP. These government savings plans will match your yearly deposits by 300%, up to a maximum of $3,500 per year, and offer a 5% return. If you’re looking for an easy way to get your child’s nest egg built up, an RDSP may be just the thing.
If you’re still unsure about whether or not your child is eligible – or how to apply – don’t hesitate to ask a certified accountant for assistance.