Are you going to fill out the disability tax credit application form? If yes, we’re glad you took this step for yourself.
Before you start filling out the disability tax credit application form, we want you to stay ahead of common mistakes people make. It is to make sure you try your best to avoid them and run a smooth disability tax credit process. The application process can be complex, and even minor errors can lead to setbacks that make the difference between approval and denial.
This detailed article will walk you through the most common mistakes people make while completing the Disability Tax Credit application. Also, provide ideas to help you prevent them.
MISTAKE 01: Incomplete Information On Form T2201
The most common mistake people make while filling out the disability tax credit application form is incorrect/incomplete information. This mistake is observed very frequently and it is the major reason behind most of the rejections.
These are some common mistakes you should avoid while filling out the form T2201:
- Double-Checking Personal Information:
Missing out on details like your full legal name, Social Insurance Number (SIN), or address can cause significant delays. Triple-check all your personal information to avoid any potential hold-ups.
- Common Errors in Part A:
In Part A, applicants often fail to list all necessary information about themselves and their medical condition. Ensure each section is complete and accurate, and review all fields before submitting.
- Common errors in Part B (Medical Practitioner Section):
This section, completed by a medical professional, can be the make-or-break part of the application. Below are some common mistakes.
Incomplete descriptions of impairments: Ensure that the medical practitioner provides a thorough description of how the impairment affects daily life.
Lack of specificity in duration: The impairment must last, or be expected to last, at least 12 months. This detail is highly essential as it directly affects your eligibility criteria.
MISTAKE 02: Insufficient Understanding Of The Eligibility Criteria
Many people fail to thoroughly understand the Canada Revenue Agency’s eligibility criteria for disability tax credit. It ultimately leads to the rejection of their application. What people often mistake about the eligibility criteria is:
- Misunderstand the concept of “prolonged” and “severe” health conditions:
To be completely eligible for the disability tax credit, your impairment is required to be both prolonged (lasting at least 12 months) and severe enough to impact everyday functioning. Applicants sometimes apply without fully understanding these conditions, resulting in an automatic denial. Review the CRA’s definitions and guidelines carefully to avoid any misconceptions.
- Assume any type of disability can qualify:
The disability tax credit does not mean that any type of disability can qualify for a tax credit. There’s a specific set of health conditions that the CRA qualifies for the tax credit. It is recommended to consult with a tax advisor or review the CRA’s online resources to confirm if your condition qualifies.
MISTAKE 03: Failing To Communicate Clearly With The Medical Practitioner:
A medical practitioner plays a major role in your disability tax credit approval process. A whole section of the disability tax credit application form is dedicated to medical practitioners. If you fail to get along with them and communicate your disability properly, it will be a hurdle for you to proceed with the process. The most common mistakes people make in this regard are:
- Not choosing the right professional:
A psychotherapist specializes in mental health conditions. Whereas, a pediatrician is specialized in kids. A bariatric surgeon specializes in obesity-related issues. Whereas, a dermatologist is specialized in skin conditions.
If you go to a pediatrician for psychotherapy, will that be alright?
Select a medical practitioner familiar with the specific nature of your impairment. The more familiar they are with your condition, the better they can detail the necessary information.
- Not explaining the details of your impairment:
According to the CRA’s criteria for disability tax credit, your physical/mental impairment must affect your daily life activities. If your practitioner fails to explain how your disability affects your daily life, how will your application get approval?
Therefore, help your practitioner understand the full impact of your disability on your life. Often, practitioners omit or understate critical details simply because they aren’t aware of the day-to-day challenges you face. Don’t be afraid to provide examples and specific instances and make sure you provide every little detail of your disability.
MISTAKE 04: Skipping The Retroactive Claims:
The Disability Tax Credit allows applicants to claim for up to 10 previous tax years if they were eligible but had not applied. However, the applicants make these common mistakes which leads to rejection. Make sure you are not one of them.
- Overlook Potential Retroactive Claims:
Failing to include retroactive claims is a missed financial opportunity. If you’ve had your impairment for multiple years but have not previously applied, include retroactive claims in your application. This could result in a substantial tax refund or reduction.
How to Apply Retroactively
Ensure that your medical practitioner confirms the impairment dates back to prior years. You may need to provide additional documentation, but the financial benefit is often well worth it.
MISTAKE 05: Rushing The Application Process
Filling out the Disability Tax Credit application form requires patience and attention to detail. Many applicants make the mistake of rushing through it, leading to incomplete or inaccurate submissions.
- Take Time to Review:
Invest your time into carefully reviewing the completed form before submission. Common mistakes such as skipped fields, unchecked boxes, and overlooked signatures can result in delays or outright denial. Set aside time to review the application with fresh eyes, or ask someone else to double-check it.
- Seek Professional Assistance:
If the process feels overwhelming, consider consulting a tax professional or disability support advocate. They can help ensure your application meets CRA requirements, saving you from costly mistakes and maximizing your chance of approval.
CONCLUSION:
Applying for the Disability Tax Credit may seem daunting, but being aware of these common mistakes can make all the difference. By providing complete and accurate information, ensuring your medical practitioner fully understands your disability, and considering retroactive claims, you can maximize your chances of receiving the DTC and ease the financial strain that comes with living with a disability.
Take your time, review your application carefully, and don’t hesitate to seek professional help if needed. By avoiding these common errors, you’re one step closer to obtaining the essential support you deserve.
For more information, you can also read about the Disability Tax Credit Payback and Business Consultant Signs.