Alberta Disability Tax Credit Calculation, Eligibility and Application
If you are or a family member is one of the nearly 400,000 disabled Canadians living in Alberta, you have probably stumbled upon this article to learn more about the Disability Tax Credit.
We have created this province-specific guide to teach you about the Disability Tax Credit and how it can help you with costs attached to your impairments, such as treatments, medication, special education programs, and more.
In a nutshell, the Disability Tax Credit is a federal credit/refund aimed at reducing the amount of income tax one must pay annually and can even provide a one-time retroactive payment if you or a family member have been living with a severe condition for a prolonged period.
If found eligible for the Disability Tax Credit, you can receive a substantial refund from the government. There are 2 types of refunds you can receive:
Adult Disability Tax Credit:
- A 10 year retroactive, one-time lump sum amount of up to $20,000
- An annual refund of up to $2,000
Child Disability Tax Credit
- A 10 year retroactive, one-time lump sum amount of up to $40,000
- An annual refund of up to $4,000
We believe it is worth your while to read and learn about the Disability Tax Credit therefore throughout this article, we will cover:
- How much a person in Alberta can receive from the Disability Tax Credit
- Eligibility criteria for the Disability Tax Credit.
- Other disability benefits or programs available in Alberta.
This article covers the Disability Tax Credit, and specifically what those living in Alberta need to know when applying. However, if you would like a deep dive into the tax refund, check out our comprehensive Disability Tax Credit guide.
What is The Disability Tax Credit?
The Disability Tax Credit is a non-refundable tax credit created by the Canadian Government and Canada Revenue Agency to assist those with disabilities who work and pay federal income tax. It was created to alleviate the additional costs of disabilities by reducing the amount they must pay on their taxes.
- The Disability Tax Credit is available to those who:
Have extreme difficulty performing ‘activities of daily living.’
Have contributed to federal taxes during the year they are applying.
The Disability Tax Credit is also available to families with disabled children under 18 through the Child Disability Tax Credit and the Child Disability Benefits.
To learn more about the Child Disability Tax Credit, check out our in-depth guide.
Who is Eligible for the Disability Tax Credit?
Now that you are aware of what the Disability Tax Credit is, you are probably wondering: “Am I eligible?.”
That answer isn’t easy to answer as the CRA considers many things when determining if an individual is eligible for the tax refund. Many believe that they’re eligible simply because they were diagnosed with an impairment – this, however, is not the case.
Having been diagnosed with an impairment is not enough to qualify for the Disability Tax Credit, you must prove to the CRA that your impairment is severe enough to cause significant impact on the activities of your daily life.
How to Determine the Disability Tax Credit Eligibility?
Determining if you are eligible for the DTC comes down to a few different factors. First, you must find out if your condition is within the eligibility criteria. Second, you must find out whether your condition is severe enough to qualify.
To determine if you qualify for the DTC, see if your condition falls under the following criteria:
The three main categories that are used to determine eligibility for DTC are:
- Physical Impairments
- Mental Illness and Psychological Impairments
- Neurological impairments
It is imperative to note that just because your condition is considered eligible for DTC, it does not mean that you will receive the tax refund. Eligibility is based on how severe your impairment is and its effects on your activities of daily living.
To be considered eligible for DTC, your impairment must also fall under one of the following:
You can’t or take an inordinate amount of time to perform one or more daily living activities, even after medication, treatment, or technological aid.
Restrictions caused by your impairment are present 90% of the time or more, OR a combination of two or more moderate restrictions cumulatively adds up to 90% of the time.
If you spend 14 hours each week or more on life-sustaining treatments such as insulin therapy, chest physiotherapy (helps with breathing), and kidney dialysis (blood filter) you may be eligible for the DTC under life-sustain therapy.
To learn more, read our Disability Tax Credit Eligibility article.
What are the Benefits of Disability Tax Credit?
While the DTC does offer you and your family financial benefits through retroactive payment and annual refund, it also opens the door for many other programs.
For an eligible adult, financial benefits can be around $1,500-$2,000 per year, and a child’s caregiver can receive as much as $4,000 per year in credits and refunds.
If found eligible for the DTC, you may also be eligible for additional programs and services, such as:
- Registered Disability Savings Plan (RDSP)
- Canada Disability Savings Bond
- Canada Disability Savings Grant
How Is The Disability Tax Credit Calculated?
Now that you understand eligibility and believe you may be applicable for the tax refund, you are most likely curious how much you can receive. This section will break down how the DTC is calculated; however, if you would like an estimation right away, we created a Disability Tax Credit Calculator where you can quickly and very accurately estimate your expected refunds.
Here is a break down of how the DTC refund is calculated:
The DTC refund amount consists of a Federal amount and a Provincial amount The Federal amount is the same across Canada, and the Provincial amount changes from Province to Province.
The Federal and Provincial amount consist of a “Base Amount” and a “Supplemental Amount,” where applicable, which we will break down here:
- Base Amount:
The Federal base amount is around 15% of the base amount ($8,576 as of 2020), equating to about $1,286.40.
The Provincial base amount is around 10% of the disability amount for that tax year ($8,712 as of 2020), equating to about $508.10.
- Supplemental Amount:
The Federal supplemental portion is 15% of the base amount ($5,003 as of 2020), equating to about $750.45.
The Provincial supplemental portion is around 10% of the disability amount for that tax year ($5,081 as of 2020), equating to about $508.10.
Therefore, the base amount from both Federal and Provincial sources is around $2,157.60, and the supplemental amount from both Federal and Provincial sources is approximately $1,258.55.
Here are the Federal and Provincial base and supplemental amounts of the past 10 years:
Federal Base amount and Supplement amount table for last 10 Years
|Year||Federal Base Amount||Federal Supplement amount|
Alberta Provincial Base and Supplement amount table for last 10 Years
|Year||Provincial Base Amount||Provincial Supplement amount|
How to Apply for the Disability Tax Credit
So, now that you know how much you could earn from the DTC, let’s discuss how to apply.
The good news is that applying for the DTC is easy, straightforward and free. Anyone can apply and there is no drawback or penalty for multiple tries.
HOWEVER, getting your DTC application approved will take more than simply applying for it and wishing for the best. You will have to build a strong case, providing as much information as possible about your condition and how it negatively impacts your life.
There are different methods for applying, each providing different results, so review your options and determine which is best for you.
Applying for the Disability Tax Credit Independently
To apply for the DTC, all you must do is take the following steps:
- Download the T2201 Form from the CRA’s website
- Print the T2201 and take it to your health care practitioner to fill out and sign.
- Send the signed T2201 by mail to the CRA’s processing centre.
While applying for the DTC independently is the most cost-effective method, it does not provide you with the best chance for approval. Drawbacks to applying independently include a lack of eligibility knowledge and not knowing how to maximize your applicable credits and benefits.
Because of this, it is best to enlist the help of a specialized DTC firm like Disability Credit Canada, as we have a thorough understanding of the DTC application process, eligibility requirements, and more.
Common Reasons for Denial of the Disability Tax Credit
Before applying it is essential to note that a large percentage of applicants get denied so it is important to understand some of the common reasons people are denied for the DTC if you want to avoid making the same mistakes.
As previously mentioned, applying for the DTC is a simple process, but being approved is not. The application process for severe or more visible impairments is rather simple, but the process becomes much more challenging for less visible or hard-to-diagnose impairments.
Throughout our many years of dealing with DTC cases, we have come across many different reasons applications are denied. Some are simple and straightforward, while others can be complex. Here are some of the more common reasons:
- Missing or incomplete information on T2201 form
- Lack of knowledge of DTC eligibility criteria
- Inconsistent medical diagnosis
- Impairment didn’t qualify
Duration of impairment too short
- Cumulative effects of impairment not included
- Lack of supporting medical documents to prove the severity of your condition
Other Disability Programs Offered in Alberta
On top of Disability Tax Credit, many other disability programs are available to eligible inhabitants of Alberta.
Assured Income for the Severely Handicapped (AISH) provides financial and health benefits for eligible Albertans with a permanent medical condition that prevents them from earning a living.
Post-Secondary Grants for Students with Permanent Disabilities supplies funding and grants available for students with permanent disabilities.
We created this guide to help inform Albertans about the Disability Tax Credit on how it helps disabled Canadians that are still able to work by providing financial assistance to help with fees linked to their impairment. There is no cost associated with applying, and you can apply as many times as needed with no added consequence.
Disability Credit Canada has helped thousands of Canadians qualify and receive the most out of the Disability Tax Credit. Our professional, dedicated staff has extensive knowledge and experience and we are committed to the successful completion of each and every application we take on.
We offer free assessments and work on a NO WIN – NO FEE basis, meaning we only get paid if you do and are incentivized to bring you the most out of your refund!
Call us today at 1-844-800-6020 for your best chance of approval for the Disability Tax Credit.