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Understanding the Disability Tax Credit

The Disability Tax Credit is one of the most underutilized credits offered by the Canada Revenue Agency...

Do you face challenges with your sight, speech or hearing?

Is getting yourself dressed, eating and getting around feel harder each day? Have you noticed changes with your bladder and bowel function?

While you might be painfully aware of the physical and cognitive changes you or a loved one is facing, you may not be aware of the tax credit that can assist those who live with one of them.

The Disability Tax Credit is one of the most underutilized credits offered by the Canada Revenue Agency. Many who would qualify for the credit, with written testimony from their physician, are never made aware of the claim.

This disconnect between the medical community and tax preparers is one that can cost the taxpayer more than $1,100 per year and can be claimed retroactively.

To qualify for the credit, one must complete a form that is then signed off by a medical professional and filed with Canada Revenue Agency for approval. The claimant must then make their tax preparer aware that they have been approved for the credit to receive the benefit on their tax return.

Qualifying ailments are those which you have suffered or expect to suffer for a period of 12 consecutive months.

While many think that this means a severe disability, the claim can be granted for less severe health issues such as slowed walking due to knee or hip problems or lack of upper body mobility such as weak or shaky hands.

Do you know someone who suffers from Crohn's disease or colitis? How about emphysema or chronic asthma? Anxiety or depression?

These are conditions that can qualify a taxpayer for the Disability Tax Credit. In fact, there are thousands of Canadians who you would never consider themselves "disabled" and yet they may qualify for a tax credit.

Recently my mother in-law underwent a hip replacement, a very common surgery for Canadians today.

So much in fact that the waiting times can be significant and the pain and lack of mobility involved in the meantime can be debilitating. Situations such as this where the taxpayer is not "disabled" but requires significantly more time to perform daily activities also qualify.

The Disability Tax Credit may be transferrable.

If you have a dependent that qualifies for the credit but does not need the credit on their own tax return, that credit, under certain criteria, may be transferred to you. This can result in significant tax savings by a parent or guardian who often bears the cost of a dependents illness or ailment.

The dependent must qualify and be approved for the Disability Tax Credit in the same manner that you would.

Regardless of age, if you or a loved one has a "disability" or a "slowness" that affects your daily life, please discuss it with your doctor and your tax preparer. The Disability Tax Credit is available to all Canadians with a qualifying ailment for which the list is exhaustive and can be found on the Canada Revenue Agency website at http://www.cra-arc.gc.ca.

Daryl Robbins is a Certified General Accountant and Notary Public with offices in Courtenay and Cumberland. Daryl has a strong focus on estate and financial planning. He can be reached at 250-871-0050 or go to www.darylrobbins.ca for more information.