DEFINITION:Canada Disability Tax Credit (T2201 Form): It is a tax credit provided by the Government of Canada to individuals with disabilities or their supporting family members. This tax credit aims to reduce the financial burden associated with disability-related expenses.
FAQs:
1. What is the purpose of the Canada Disability Tax Credit?
The purpose of the Canada Disability Tax Credit is to provide financial assistance to individuals with disabilities or their supporting family members. It aims to help offset the additional costs associated with living with a disability.
2. Who is eligible to claim the Canada Disability Tax Credit?
To be eligible for the Canada Disability Tax Credit, an individual must have a severe and prolonged impairment in physical or mental functions, certified by a medical professional. This impairment should significantly restrict their daily activities.
3. How can I apply for the Canada Disability Tax Credit?
To apply for the Canada Disability Tax Credit, you need to complete and submit the T2201 Form, also known as the Disability Tax Credit Certificate. This form requires detailed information about the impairment from a medical practitioner.
4. Is the Canada Disability Tax Credit a one-time payment?
No, the Canada Disability Tax Credit is not a one-time payment. It is a non-refundable tax credit which can be claimed annually. It can potentially reduce the amount of income tax payable by the individual or their supporting family members.
5. Can the Canada Disability Tax Credit be transferred to another person?
Yes, the Canada Disability Tax Credit can be transferred to a supporting family member. The supporting family member must meet specific criteria and must complete specific sections of the T2201 Form.
6. Can I retroactively claim the Canada Disability Tax Credit?
Yes, you may be able to claim the Canada Disability Tax Credit retroactively for up to ten years if you were eligible but did not claim it in previous years. However, it is advisable to consult with a tax professional to understand the specific rules and limitations.
7. Are there any other benefits associated with the Canada Disability Tax Credit?
Yes, claiming the Canada Disability Tax Credit may open the door to other benefits, such as the Registered Disability Savings Plan (RDSP) and the Working Income Tax Benefit (WITB). These additional benefits can provide further financial support to eligible individuals and their families.