The disability tax credit program offers hope to people with potential physical and intellectual disabilities. It is administered by the Government of Canada and the Canada Revenue Agency (CRA). According to the findings from the most recent Canadian Survey on Disability (CSD), one in five Canadians (6.2 million) has one or more disabilities that restrict their daily activities performance.
This disability tax credit in Mississauga program has been helping hundreds of disabled individuals receive quality social, emotional, financial, and medical support. In this guide, you’ll learn how to maximize the disability tax credit if you are an individual or a caregiver of someone experiencing any kind of long-term disability.
WHAT IS THE DISABILITY TAX CREDIT?
It is a non-refundable federally administered program that helps to reduce the due income tax on an individual with disability. It provides substantial financial and moral support for disabled individuals and their caregivers.
The disability tax credit is divided into two parts. A federal and provincial amount.
The federal amount is the same for individuals throughout the country, however, the provincial amount may vary from province to province.
TIPS & STRATEGIES TO MAXIMIZE YOUR DISABILITY TAX CREDIT
You might be wondering how to take full advantage of the disability tax credit. Well, here’s a list of 10 tips and strategies you can adopt to maximize your disability tax credit.
- Claim retroactive benefits:
One of the best ways to maximize the disability tax credit is to claim retroactive benefits. You might not be aware of this but if you are qualified for DTC, you can claim up to 10 years of back credits.
It means if you didn’t apply for the tax credit before, you can claim it now!
- Transfer the credit to a supporting family member:
If you do not have enough taxable income to use the entire amount of the DTC, you can give the unused portion to a spouse, parent, or other supporting family member. This permits someone else to benefit from the tax breaks if they assist the person with a disability.
- Take advantage of the linked benefits:
If you qualify for the disability tax credit, you can apply for other programs as well. Such as parents with children under 18 may qualify for the Child Disability Benefit.
Moreover, you can also contribute to a Registered Disability Savings Plan (RDSP), which offers grants and bonds from the government. That’s how you can take advantage of the further linked benefits and maximize your tax credit.
- Ensure your medical documents are accurate and up-to-date:
The Canada Revenue Agency has strict policies regarding medical documentation and the overall tax credit process. Make sure that your medical practitioner provides thorough and complete details of how your disability affects your daily life.
Keep in mind that incomplete and vague applications can lead to delays or even rejections.
- Claim medical expenses in addition to the DTC:
Apart from the disability tax credit, you can also claim some medical expenses. Don’t forget to claim these expenses as you can greatly reduce your tax burden by utilizing these opportunities.
Some of the common medical expenses include prescriptions, mobility aids, and therapy sessions.
- Stay updated with changes in legislation:
Another important tip to maximize your tax credit is to stay updated on the DTC policies and the eligibility criteria as it is adjusted regularly.
- Consult a tax professional:
Applying for the DTC can be complex, and many people find that their applications are rejected due to small errors. Working closely with a tax professional or a consultant who specializes in disability claims can help you ease out the process and maximize your refund.
- Plan for the long-term:
The disability tax credit is not a temporary or monthly-based program, it is a lifelong support. You can save for your future by setting up an RDSP. These savings plans are especially helpful for those with lifelong disabilities.
- Consider provincial disability credits:
Apart from the federal disability tax credit, some provincial governments also offer DTC. Make sure to check with your provincial or territorial tax authority to see if you qualify for additional tax relief at the local level.
- Appeal if necessary:
If your application is denied, you have the right to appeal. First, you can request a review, and if that is unsuccessful, you can escalate the appeal to the Tax Court of Canada. Many initial denials are overturned after a review, so it’s worth pursuing if you believe you qualify.
CONCLUSION:
Many Canadians are still not aware of the disability tax credit and how much will i get they get as the benefits from it. The whole process is simple and once completed, individuals can receive thousands of dollars in returns from CRA to manage their medical costs.
Stay updated on the disability tax credit policies, eligibility criteria, and the required documents. Complete the disability tax credit application form, submit the necessary paperwork, and wait for the CRA’s review, which may take a few weeks. Upon approval, you will receive the tax credit. For more information on choosing the right tax accountant to assist you, explore our guide on How to Choose a Personal Tax Accountant for Your Needs, and check out Top Strategies for Tax Optimization in 2024 for further insights on maximizing your tax benefits.
At Numeracy Accounting Solutions, we take pride in providing the best access to diabetes and disability tax credit services. Book your slot now and take the first step towards claiming your disability income tax credit.