DEFINITION:
Canada Disability Tax Credit 2021 refers to a tax benefit offered by the Canadian government to individuals with disabilities. It is designed to provide financial support to those who have impairments that significantly affect their daily lives and require assistance with various activities.
FAQs:
1. What is the Canada Disability Tax Credit (DTC)?
The Canada Disability Tax Credit (DTC) is a non-refundable tax credit that can be claimed by individuals who have a severe and prolonged impairment in physical or mental functions that significantly affects their daily lives.
2. Who is eligible for the Canada Disability Tax Credit?
To be eligible for the Canada Disability Tax Credit, you must have a qualifying disability that is certified by a medical professional. The impairment should be expected to last for at least 12 months and must significantly restrict one or more of the basic activities of daily living.
3. How much is the Canada Disability Tax Credit worth?
The value of the Canada Disability Tax Credit varies depending on the severity of your disability and other factors. In 2021, the maximum federal credit amount is $8,576. An additional amount may also be available if you have a dependent with a disability.
4. How do I apply for the Canada Disability Tax Credit?
To apply for the Canada Disability Tax Credit, you need to complete Form T2201, Disability Tax Credit Certificate. This form must be certified by a medical professional who can attest to the extent of your disability and its impact on your daily life. Once approved, you can claim the credit on your income tax return.
5. Is the Canada Disability Tax Credit the same as the Registered Disability Savings Plan (RDSP)?
No, the Canada Disability Tax Credit and the Registered Disability Savings Plan (RDSP) are different programs. While the DTC provides a tax credit, the RDSP is a savings plan specifically designed to help individuals with disabilities save for the future.
6. Are there any provincial disability tax credits in addition to the federal credit?
Yes, some provinces and territories in Canada offer their own disability tax credits in addition to the federal credit. These credits may have different eligibility criteria and values, so it is important to check with your respective provincial/territorial tax authority for more information.
7. Can I transfer my Canada Disability Tax Credit to a caregiver or family member?
In certain situations, the Canada Disability Tax Credit can be transferred to a caregiver or family member who supports and provides for the person with the disability. This is known as the Family Caregiver Amount. Transferability rules may differ depending on the province/territory, so it is advisable to consult with a tax professional for guidance.