DEFINITION:Disability Tax Credit (DTC): The Disability Tax Credit is a non-refundable tax credit available to individuals with disabilities in Canada. It is designed to provide financial support and assistance to those who have a severe and prolonged impairment in physical or mental functions.
Q1: Who is eligible for the Disability Tax Credit?
A1: To be eligible for the Disability Tax Credit, you must have a severe and prolonged impairment in physical or mental functions that has lasted, or is expected to last, for a continuous period of at least 12 months. This impairment must be certified by a qualified medical practitioner.
Q2: How do I apply for the Disability Tax Credit?
A2: To apply for the Disability Tax Credit, you need to complete and submit Form T2201, Disability Tax Credit Certificate, to the Canada Revenue Agency (CRA). This form requires medical certification of your disability and an assessment of your ability to perform daily activities.
Q3: Can I apply for the Disability Tax Credit retroactively?
A3: Yes, you can request retroactive claims for up to 10 years. However, it is recommended to apply as soon as you become eligible to ensure you maximize your potential tax savings.
Q4: How much money can I receive through the Disability Tax Credit?
A4: The exact amount of money you can receive through the Disability Tax Credit varies based on your disability and income level. The credit reduces the amount of federal income tax you owe.
Q5: Are there additional benefits available for individuals receiving the Disability Tax Credit?
A5: Yes, receiving the Disability Tax Credit can make you eligible for other government benefits such as the Registered Disability Savings Plan (RDSP) and the Child Disability Benefit (CDB).
Q6: Can I transfer the Disability Tax Credit to a family member?
A6: In certain situations, the Disability Tax Credit can be transferred to a supporting family member. This occurs when the person with the disability hasn’t utilized the full credit, and they don’t need it to reduce their own taxes payable.
Q7: What happens if my Disability Tax Credit application is denied?
A7: If your application is denied, you have the option to appeal the decision with the CRA. It is advisable to seek assistance from a tax professional or disability advocate to help with your appeal process.