Canadian Money Forum banner

1 - 11 of 11 Posts

·
Registered
Joined
·
12 Posts
Discussion Starter #1
Hi there,
I have a few questions about the disability tax credit
My daughter is 2 years old, she was born March 2013
I was recently made aware that she qualifies for the DTC (she was born with a neuroligical condition, brain cyst at birth, delays, septo-optic dysplasia etc)
I want to apply, I have the T2201 and am in the process of having her specialists complete it
My question is, what are the amounts for 2013 and 2014? Will they adjust my income tax return for these years?
I pulled this amount off the website for 2013 - $7,766 - and then there are a few other amounts, like the caregiver tax credit - $4490.00 -
Is it either or, or would I receive both? If her application is approved, is it a direct deposit lump some?
And same for 2014, the amount for dependant is - $7766.00 - and then theres also the supplement and caregiver for - $4530.00 -
When sending in the T2201, do I have to include anything additional to request backpay?
It's hard to believe for me that the government would deposit 20 000+ dollars, although we've had an extremely difficult few years, this just seems outrageous.
There also seems to be a Child Disability Benefit. Is this a seperate application? It seems to connect to DTC, and be the same form, I just want to make sure.
The maximum amount is $222 per month, and I was wondering if this is something they offer backpay on as well? Would that be an additional $2500.00 for the 2 years she should have been receiving it.
Thanks in advance for help.
 

·
Registered
Joined
·
319 Posts
I'm sorry to hear about your daughter. If she is approved for the tax credit, then you can go back and refile your income taxes for 2013 and 2014, assuming that she is retroactively approved. The CRA will not do it for you. Once you have done that, and the CRA has reassessed your filings for those years, they will send you a lump sum payment of whatever your rebate is for those two years. If your tax rebates are sent via direct deposit now, that's how they do it. If they send you a cheque now, that's how they will do it.

The DTC is not $7,766 in your pocket, but it increases the amount that you can make without paying taxes. Right now, the first $11,138 that you earn you pay 0 taxes on. For you, it would be the first $18,904 (the basic exemption and the DTC). So you'd get a tax rebate of a portion of that $7,766.

According to this site, you can get both the caregiver credit and the DTC. http://www.cra-arc.gc.ca/familycaregiver/

My understanding is that you can get the Child Disability Benefit retroactive too, but you have to write to the CRA and request it be retroactive and show that the disability was retroactive.

Hopefully this helps in some way, the CRA is actually very good at answering questions themselves. Now that it's May it's likely a little less busy.
 

·
Registered
Joined
·
1,108 Posts
You should read the CRA guide for people with disabilities. That will help you understand all of the tax benefits available.

I can help with a couple of your questions, but this is a complex area, so you really have top educate yourself.

First, the numbers you cited above are "credit amounts". They will be multiplied by 15% to determine the tax credit you can apply against tax you are paying. There are also similar provincial credits - the amounts are about the same, but they are provided at lower rates (5.05% for Ontario, e.g.).

If you haven't filed your 2014 return, send in the disability tax certificate with your return. You must file on paper the first time you claim this. If you have already filed, and for 2013, you must file a T1ADJ form to ask CRA to adjust your returns). You can get this form on the CRA website.
 

·
Registered
Joined
·
12 Posts
Discussion Starter #4
I'm sorry to hear about your daughter. If she is approved for the tax credit, then you can go back and refile your income taxes for 2013 and 2014, assuming that she is retroactively approved. The CRA will not do it for you. Once you have done that, and the CRA has reassessed your filings for those years, they will send you a lump sum payment of whatever your rebate is for those two years. If your tax rebates are sent via direct deposit now, that's how they do it. If they send you a cheque now, that's how they will do it.

The DTC is not $7,766 in your pocket, but it increases the amount that you can make without paying taxes. Right now, the first $11,138 that you earn you pay 0 taxes on. For you, it would be the first $18,904 (the basic exemption and the DTC). So you'd get a tax rebate of a portion of that $7,766.

According to this site, you can get both the caregiver credit and the DTC. http://www.cra-arc.gc.ca/familycaregiver/

My understanding is that you can get the Child Disability Benefit retroactive too, but you have to write to the CRA and request it be retroactive and show that the disability was retroactive.

Hopefully this helps in some way, the CRA is actually very good at answering questions themselves. Now that it's May it's likely a little less busy.
Thanks, this was helpful.
I did phone them and she just told me to fill out the form and submit it to them and they will answer me in 6-8 weeks and if she was born with the disability they would credit me from the date she was born. When I asked how she said they just would. I didn't think it was that easy.

I don't know if I fully understand.
I've been on social assistance for the majority of the time, I have been at home taking care of her, she is in and out of the hospital and she is difficult to deal with, so daycare wasn't really an option.
So technically I have no taxable income, I haven't paid taxes or received a return since before she was born, as I haven't worked.
So would I receive the full amount? Or would I receive nothing then?
 

·
Registered
Joined
·
12 Posts
Discussion Starter #5
You should read the CRA guide for people with disabilities. That will help you understand all of the tax benefits available.

I can help with a couple of your questions, but this is a complex area, so you really have top educate yourself.

First, the numbers you cited above are "credit amounts". They will be multiplied by 15% to determine the tax credit you can apply against tax you are paying. There are also similar provincial credits - the amounts are about the same, but they are provided at lower rates (5.05% for Ontario, e.g.).

If you haven't filed your 2014 return, send in the disability tax certificate with your return. You must file on paper the first time you claim this. If you have already filed, and for 2013, you must file a T1ADJ form to ask CRA to adjust your returns). You can get this form on the CRA website.
I filed my returns already for 2013 and 2014.
I did not pay any taxes, my income is from the government already and it is obviously non taxable.
So what would the 15% mean?
 

·
Registered
Joined
·
12 Posts
Discussion Starter #6
You should read the CRA guide for people with disabilities. That will help you understand all of the tax benefits available.

I can help with a couple of your questions, but this is a complex area, so you really have top educate yourself.

First, the numbers you cited above are "credit amounts". They will be multiplied by 15% to determine the tax credit you can apply against tax you are paying. There are also similar provincial credits - the amounts are about the same, but they are provided at lower rates (5.05% for Ontario, e.g.).

If you haven't filed your 2014 return, send in the disability tax certificate with your return. You must file on paper the first time you claim this. If you have already filed, and for 2013, you must file a T1ADJ form to ask CRA to adjust your returns). You can get this form on the CRA website.
Actually to correct that, in 2013 I did work for a short period of time, and I ended up with a return because I didn't make enough money and received the working income tax benefit
 

·
Registered
Joined
·
1,108 Posts
The disability tax credit us not refundable - it only reduces the tax you pay until it reaches zero. It sounds like you don't pay income tax, so I think it won't help. Part of the medical expenses tax credit is refundable, though, so you may get some money back there.It is worth going through the guide to understand the different credits and benefits that are available.
 

·
Registered
Joined
·
52 Posts
iherald and Davis have done a good job covering how the "Disability Tax Credit" credit works.

In terms of the process: You send in the T2201, it gets forwarded to CRA's Disability Tax Credit Unit, they review it and will issue you a "Notice of Determination" which you will receive in the mail. Assuming the DTC is approved, the letter will often specify that if you would like your returns adjusted, you can write the unit back and they will make the adjustments to your return(s) for the year(s) in question. They generally don't even require a formal "T1 Adjustment Request" for this -- just a letter acknowledging that you would like them to make the adjustment.

For you, there won't be a benefit from an income tax perspective if your income is all non-taxable, because you will not have paid any taxes that could be recovered. However, it is still worth applying for the DTC because it can provide you with access to other disability-related government programs. For example, you can gain access to the following, through your daughter's eligibility for the DTC:

The Child Disability Benefit ("CDB"): This is not a credit like the "Disability Tax Credit". Rather, it is a monthly benefit that is a supplement to the Canada Child Tax Benefit ("CCTB"). Both the CDB and CCTB are income-tested, meaning if your family net income is above a certain threshold, the benefit gets ground down/eventually eliminated. Both benefits are paid monthly.

You should also look in to setting up a Registered Disability Savings Plan ("RDSP") for your daughter. Through the Canada Disability Savings Grant program, the government will make contributions (ranging from 1x to 3x your contribution) depending on your contributions and your family net income (to a yearly maximum of $3,500 in government contributions and $70,000 over your daughter's lifetime).

Even if you don't have any extra money to contribute to an RDSP, you should still set it up. The Canada Disability Savings Bond program will contribute up to $1,000 a year to low-income Canadians with disabilities to a maximum of $20,000 over their lifetime.
 

·
Registered
Joined
·
12 Posts
Discussion Starter #9
iherald and Davis have done a good job covering how the "Disability Tax Credit" credit works.

In terms of the process: You send in the T2201, it gets forwarded to CRA's Disability Tax Credit Unit, they review it and will issue you a "Notice of Determination" which you will receive in the mail. Assuming the DTC is approved, the letter will often specify that if you would like your returns adjusted, you can write the unit back and they will make the adjustments to your return(s) for the year(s) in question. They generally don't even require a formal "T1 Adjustment Request" for this -- just a letter acknowledging that you would like them to make the adjustment.

For you, there won't be a benefit from an income tax perspective if your income is all non-taxable, because you will not have paid any taxes that could be recovered. However, it is still worth applying for the DTC because it can provide you with access to other disability-related government programs. For example, you can gain access to the following, through your daughter's eligibility for the DTC:

The Child Disability Benefit ("CDB"): This is not a credit like the "Disability Tax Credit". Rather, it is a monthly benefit that is a supplement to the Canada Child Tax Benefit ("CCTB"). Both the CDB and CCTB are income-tested, meaning if your family net income is above a certain threshold, the benefit gets ground down/eventually eliminated. Both benefits are paid monthly.

You should also look in to setting up a Registered Disability Savings Plan ("RDSP") for your daughter. Through the Canada Disability Savings Grant program, the government will make contributions (ranging from 1x to 3x your contribution) depending on your contributions and your family net income (to a yearly maximum of $3,500 in government contributions and $70,000 over your daughter's lifetime).

Even if you don't have any extra money to contribute to an RDSP, you should still set it up. The Canada Disability Savings Bond program will contribute up to $1,000 a year to low-income Canadians with disabilities to a maximum of $20,000 over their lifetime.


Okay so to my understanding I will not receive anything from the Disability Tax Credit because i'm on income assistance. The only thing I will receive is the child disability benefit?
Thank you for the info on the RDSP. I appreciate it! And all the info. I wish the doctors or social workers will helpful at all with these things, they don't tell you a darn thing.
Thanks again
 

·
Registered
Joined
·
12 Posts
Discussion Starter #10
iherald and Davis have done a good job covering how the "Disability Tax Credit" credit works.

In terms of the process: You send in the T2201, it gets forwarded to CRA's Disability Tax Credit Unit, they review it and will issue you a "Notice of Determination" which you will receive in the mail. Assuming the DTC is approved, the letter will often specify that if you would like your returns adjusted, you can write the unit back and they will make the adjustments to your return(s) for the year(s) in question. They generally don't even require a formal "T1 Adjustment Request" for this -- just a letter acknowledging that you would like them to make the adjustment.

For you, there won't be a benefit from an income tax perspective if your income is all non-taxable, because you will not have paid any taxes that could be recovered. However, it is still worth applying for the DTC because it can provide you with access to other disability-related government programs. For example, you can gain access to the following, through your daughter's eligibility for the DTC:

The Child Disability Benefit ("CDB"): This is not a credit like the "Disability Tax Credit". Rather, it is a monthly benefit that is a supplement to the Canada Child Tax Benefit ("CCTB"). Both the CDB and CCTB are income-tested, meaning if your family net income is above a certain threshold, the benefit gets ground down/eventually eliminated. Both benefits are paid monthly.

You should also look in to setting up a Registered Disability Savings Plan ("RDSP") for your daughter. Through the Canada Disability Savings Grant program, the government will make contributions (ranging from 1x to 3x your contribution) depending on your contributions and your family net income (to a yearly maximum of $3,500 in government contributions and $70,000 over your daughter's lifetime).

Even if you don't have any extra money to contribute to an RDSP, you should still set it up. The Canada Disability Savings Bond program will contribute up to $1,000 a year to low-income Canadians with disabilities to a maximum of $20,000 over their lifetime.
I'm wondering if I will still receive the DTC supplement?

I found this:
The supplemental amount is available to an eligible person with a disability who is under 18 years of age at the end of the tax year. The maximum supplemental amount is a fixed amount ($4,530 for 2014), that is indexed each year in accordance with subsection 117.1(1). In certain circumstances, discussed at ¶2.28 below, the supplemental amount may be reduced. Assuming there is no reduction to the supplemental amount for the tax year, the maximum tax credit available in respect of the supplemental amount for 2014 is $680 (15% x $4,530).

But it sounds like jibberish to me, I am not very good with this kind of stuff. Because it is a fixed amount to persons with disabilities or dependants with a disability would I get it without taxable income?
 

·
Registered
Joined
·
52 Posts
The supplement is an enhancement of the regular disability credit for children under the age of 18. No benefit as there is no income tax to recover (credit is still non-refundable).

No problem re: providing you with more info. I know first-hand that it can be hard to get information and social workers aren't always equipped with the financial knowledge of what is or is not available (as an aside, I grew up on social assistance...single parent mother who became physically disabled after working in a labour-intensive factory for many years). I am now a CPA, CA and while I mostly work with high net worth clients, I still have a soft spot for helping out lower-income individuals where I can (mostly through the CPA tax clinics though!).

Cheers,
WiseOwl
 
1 - 11 of 11 Posts
Top