DEFINITION: Canada Federal Disability Tax Credit is a non-refundable tax credit provided by the federal government of Canada to individuals with disabilities or their supporting family members. It aims to reduce the income tax payable and assist those with disabilities in offsetting additional expenses incurred due to their disability.
1. What is the eligibility criteria for the Canada Federal Disability Tax Credit?
To be eligible for the Canada Federal Disability Tax Credit, an individual must have a severe and prolonged physical or mental impairment that significantly restricts their ability to perform daily activities and is expected to last for at least 12 months.
2. How much is the Canada Federal Disability Tax Credit worth?
The amount of the tax credit varies depending on the severity of the disability. The credit is calculated based on the individual’s income and the applicable tax rates.
3. Who can claim the Canada Federal Disability Tax Credit?
The tax credit can be claimed by individuals with disabilities who meet the eligibility criteria. In some cases, supporting family members, such as parents or guardians, can claim the credit on behalf of a disabled child or dependent.
4. Can I claim the Canada Federal Disability Tax Credit retroactively?
Yes, it is possible to claim the tax credit retroactively for up to 10 years if the individual met the eligibility criteria during those years but did not claim the credit previously. However, it is recommended to seek professional tax advice to determine the best course of action.
5. Is the Canada Federal Disability Tax Credit applicable for all disabilities?
The tax credit is applicable for various physical and mental impairments that substantially restrict daily activities. However, not all disabilities are eligible, and the determination is based on the guidelines provided by the Canada Revenue Agency (CRA). It is advisable to consult the CRA or a tax professional to determine eligibility.
6. Can the Canada Federal Disability Tax Credit be transferred to a supporting family member?
In certain cases, the tax credit can be transferred to a parent, spouse, or common-law partner of an individual with a disability if they do not have sufficient taxable income to fully utilize the credit. This provision helps maximize the benefit for the family as a whole.
7. Are there any additional provincial or territorial disability tax credits?
In addition to the Canada Federal Disability Tax Credit, some provinces and territories in Canada offer their own disability tax credits. These credits may have separate eligibility criteria and application processes. It is important to check with the specific province or territory for more information.