Don’t Make These Common Mistakes on Your Disability Tax Credit Application
There are few things in life more difficult than suffering from a physical or mental disability. First there is grappling with the condition itself, then dealing with possible feelings of depression and uselessness. And if you’re unable to work, you and your family may be struggling to get by on a reduced income.
Fortunately for the millions of disabled people across Canada, financial assistance is offered in the form of the Canadian Disability Tax Credit (Read our Disability Tax Credit Form Guide to find out more). If you have a condition that is both severe and prolonged, you and your family can potentially receive thousands of dollars in annual tax credits, money that can be used to pay for day-to-day expenses like rent, groceries and medicine.
How to Get Your Disability Tax Credit Application Wrong
While the Disability Tax Credit has quite literally been a lifesaver for countless Canadian families, many people miss out on the benefits they’re entitled to because they don’t fill out the paperwork correctly. Here are some things to watch out for when filling out and submitting your application:
- Sending the Certificate to the Wrong Address – The Revenue Service of Canada doesn’t allow people to apply for the Canadian Disability Tax Credit electronically. That’s a minor inconvenience, but it can turn into a major hassle if you don’t send the application certificate to the right address.Your application will eventually be forwarded and processed, but the process will take a lot longer, and you may not get the money when you need it. That’s why you need to send everything to the tax centre serving the area in which you live.If you live in Alberta or Manitoba, your tax centre is in Winnipeg. If you live in Ontario or some parts of Quebec, your tax centre is in Toronto. The certificate contains a detailed chart listing the address of every tax office in the country.
- Misunderstanding the Criteria for “Severe” Condition – Many people with disabilities think that because they have a condition that is debilitating by definition (multiple sclerosis, cerebral palsy, rheumatoid arthritis, etc.) that they automatically qualify for the tax credit. They then make the mistake of failing to document their condition in detail.That can be a grave error, because the Revenue Service has complex criteria for defining a condition as “severe.” The condition must severely impair your ability to perform basic functions (defined as taking three times as long as what is considered normal) or require sessions of “life-sustaining therapy” at least three times per week. It also must be “prolonged” – has lasted or is expected to last for at least one calendar year.Even if you have a documented disability, speak with a social services professional before submitting the Disability Tax Credit application.
- Not Demonstrating When the Disability Began – This common mistake causes many would-be eligible people to miss out on thousands of dollars. When submitting your application, it is absolutely essential that you indicate the date when you first became disabled, having a licensed practitioner approve and sign off as well.Sending a Disability Tax Credit application without putting a precise date on your disability is like sending a blank piece of paper. You will be rejected, and your family will suffer.
- Not Filling out the Document with a Doctor – The Revenue Service requires that relevant sections of the Disability Tax Credit application are signed by a licensed practitioner. The doctor vouches for the severity and length of the disability.Some applicants overlook this part of the application, which is absolutely crucial. Firstly, if you’re disabled, you should see your doctor regularly to check up on your condition. Secondly, you should consult with your doctor before submitting the application in any given year.In fact, most doctors in Canada are experienced in dealing with tax credit applications, and can help make sure the certificate is filled out correctly.
- Not Claiming for Previous Years – As mentioned above, be sure to indicate the date your disability began. That’s important for receiving the tax credit for the current tax year, but matters for past years as well.The Revenue Service allows you to file for the Tax Credit for past years, even if this year is the first time you’ll submit an application. You just need to prove that your condition has lasted for more than one tax year.Many physical and mental conditions last for years, and some are permanent. By applying for the tax credit for every year you’ve been disabled, you can turn a credit worth roughly $1,850 annually into potentially tens of thousands of dollars. That can save your family’s finances.
- Not Transferring Credit to a Relative – In order to claim the Canadian Disability Tax Credit directly, you need to have taxes payable. That means that before becoming disabled your income was high enough that you owed money to the Revenue Service.Most of Canada’s disabled have low incomes, and many depend on provincial aid programs such as the Ontario Disability Support Program (ODSP). Unfortunately, many of these people don’t bother applying for the tax credit, believing themselves to be ineligible.That’s a big mistake, because even if you don’t have taxes payable, you can still transfer the credit to a relative who helps you with the “basic necessities of everyday life.” Just because you don’t pay taxes doesn’t mean your family can’t benefit!
Getting Your Disability Tax Credit Application Right
If your application is rejected because of shoddy or incomplete paperwork, all is not lost. You can make the necessary corrections and reapply, and in most cases you’ll get the money you need. But that takes a lot of time and hassle, and it’s best to get things right the first time around.
If you’re looking for professional assistance in submitting your Disability Tax Credit application, Disability Credit Canada is the first number you should call. Located in Toronto, we’ve spent decades helping families across Canada get the money they need, and can ensure that your application is successful!