Webinar for persons with disabilities part 1
Please note: The content of this presentation is accurate as of the date it was aired, on December 8, 2021. For the most recent information on these topics, go to the following website: Disability tax credit (DTC)
Hi, my name is Nicole, I work at the Canada Revenue Agency, also known as the CRA. I'm very happy to be here today to talk to you about the disability tax credit.
I would like to begin by acknowledging that I am presenting to you from the traditional territories of the Niitsitapi (Blackfoot) and the people of the Treaty 7 region in Southern Alberta, which includes the Siksika, the Piikani, the Kainai, the Tsuut'ina and the Stoney Nakoda First Nations, including Chiniki, Bearpaw, and Wesley First Nations. The City of Calgary is also home to Métis Nation of Alberta, Region III.
We recognize that everyone on the line is joining us from different places. We invite you to take a moment to reflect on the territory that you are joining us from.
Here are the topics we'll cover today. I want to start by giving you an overview of the disability tax credit. I'll talk about eligibility, how to apply, and how much you can claim when doing your taxes.
We will also be going over:
- The importance of doing your taxes, and
- How you may be able to get free help
Let's get started!
What is the Disability Tax credit?
The disability tax credit is commonly referred to as the DTC. The purpose of the DTC is to provide some relief for unavoidable, additional expenses that result from living with a disability. It helps offset costs other taxpayers don't have to face.
The DTC is a non-refundable tax credit that helps persons with disabilities or their supporting family members. Because it's non-refundable it reduces the amount of income tax they may have to pay.
It does not mean that they will receive money back, like they would with the Canada child benefit for example, it simply reduces any amount owing for them or for their supporting family member.
A supporting family member can be a spouse or common-law partner, parent, grand-parent, child, grand-child, brother, sister, uncle, aunt, niece, or nephew of the person with the disability.
A supplement for persons under 18 years of age is available if they are eligible.
Being eligible for the DTC can open the door and act as a gatekeeper to other federal, provincial, and territorial programs such as the registered disability savings plan, the Canada workers benefit, and the child disability benefit.
This makes it important to apply for the DTC even if you have a low, or no income. It is important that all eligible individuals apply for the DTC in order to qualify for other disability-related programs, benefits, and plans. You cannot access these critical programs without first qualifying for the DTC.
If you're eligible for the DTC, you can claim the disability amount of up to $8,662 on your tax return.
For those under 18 years of age, you can also claim a supplement of up to $5,053.
All or part of the credit amount can also be transferred to a spouse or common-law partner, or to another supporting family member.
Now, let's see if you might be eligible…
When we talk about eligibility, it's important to note that eligibility for the disability tax credit is based on the effects of the impairment, and not on the medical condition.
For example, let's say two people have the same medical condition. And they both have a walking impairment.
Over the same distance, one can walk at a reasonable pace. While the other needs a walker and must stop frequently to rest.
Although these two people have the same medical condition, the effects are different.
A medical practitioner has to certify that you have a severe and prolonged impairment and provide the effects of that impairment. Eligibility for the DTC is based on the information they provide. Your medical practitioner is also asked to provide the year your activities became markedly restricted.
Please also note that you may not be eligible for the DTC even if you receive the Canada Pension Plan or Quebec Pension Plan disability benefits, workers' compensation benefits, or other types of disability or insurance benefits.
The only one way to find out if you're eligible, is to fill out, and submit, Form T2201, Disability Tax Credit Certificate with input from your medical practitioner.
Eligibility for the DTC falls under these categories:
- eliminating (bowel and bladder functions)
- mental functions necessary for everyday life
- cumulative effect of significant limitations
- life-sustaining therapy
The following categories have their own unique criteria:
- cumulative effect of significant limitations
- life-sustaining therapy
An individual may be eligible if they have an impairment in physical or mental functions that is severe and prolonged, resulting in a marked restriction.
A marked restriction means that, even with appropriate therapy, devices, and medication, the individual is unable or takes an inordinate amount of time to perform activities or functions in one of the impairment categories.
And that this is the case all or substantially all of the time.
The medical practitioner is also asked to provide the year that the eligibility criteria is met. This is not necessarily the date that the diagnosis was made but rather when you began to experience significant changes to your abilities.
As I mentioned, there are 3 categories that have their own unique criteria. The first is vision.
You are eligible if you are blind.
A person is considered blind if, even with the use of corrective lenses or medication, both eyes meet at least one of the following criteria:
- The visual acuity is 20/200 (6/60) or less on the Snellen Chart (or an equivalent), and/or
- The greatest diameter of the field of vision is 20 degrees or less.
The second category with unique criteria is cumulative effect of significant limitations. To be eligible for the DTC under the cumulative effect of significant limitations category, an individual must have limitations in two or more categories with the exception of life-sustaining therapy.
These limitations must:
Exist together all or substantially all of the time and have a combined impact that is:
- equivalent to being unable, or taking an inordinate amount of time, in one category
- present all or substantially all of the time (generally interpreted as 90% or more), even with appropriate therapy, devices, and medication
Please note that when we say all or substantially all of the time, it is generally interpreted as 90% or more of the time.
The final category with unique criteria is Life-sustaining therapy. The criteria for life-sustaining therapy is met when therapy is needed to support a vital function at least 3 times per week, for an average of at least 14 hours a week. This is true even if the therapy eases the symptoms.
You must also have to dedicate time for the therapy – that is, you have to take time away from your normal, everyday activities to receive it. This time includes the time you need to set up a portable device.
There are some activities that do not count in the 14 hours per week requirement. These are:
- The time a portable or implanted device takes to deliver the therapy (such as an insulin pump, a CPAP machine, or a pacemaker)
- Activities related to dietary restrictions or regimes, even when these activities are a factor in determining the daily dosage of medication (such as carbohydrate calculation)
- Activities related to exercising, even when these activities are a factor in determining the daily dosage of medication
- Travel time to receive the therapy
- Going to medical appointments (other than appointments where the therapy is received)
- Buying medication
- And, recuperating after therapy
Next, we're moving on to how to apply.
To apply, complete Form T2201, Disability Tax Credit Certificate. On the CRA website, go to form T2201, Disability Tax Credit Certificate, where you can either use the fillable PDF version or print a copy of Form T2201 to fill it out manually.
The form has two parts: Part A and Part B.
Part A has to be filled out and signed by the person with the disability or a legal representative.
Part B has to be filled out and signed by a medical practitioner manually on paper or by using the new digital application.
A medical practitioner is either a medical doctor or a nurse practitioner. Depending on the type of impairment, other medical practitioners can also fill out your form.
Send the form to the CRA once parts A and B are filled out and signed by the appropriate medical practitioner.
You can mail the completed form to the CRA. Or if you're registered for My Account or Represent a client, you can use these services to submit the form online using the secure online tool "Submit Documents".
In the previous slide, I mentioned medical doctors and nurse practitioners. They can certify all sections on Form T2201.
Other medical practitioners can also fill out Part B of your form.
They can only certify for the following impairments:
Optometrist – vision
Audiologist – hearing
Occupational therapist – walking, feeding, dressing
Physiotherapist – walking
Psychologist – mental functions necessary for everyday life
Speech-language pathologist – speaking
Cumulative effect of significant limitations – an Occupational therapist for walking feeding, dressing, and
Life-sustaining therapy – a medical doctor or nurse practitioner
As mentioned, there are two ways to apply. The first is by using the digital application.
When using the digital application, follow these steps
Step 1 – Ask your medical practitioner to fill out Part B
If you and your medical practitioner think you may be eligible for the DTC, you can direct your medical practitioner to the digital application for medical practitioners or go to canada.ca/dtc-digital-application.
This service allows your medical practitioner to complete Part B of Form T2201 by answering a series of questions which will provide the CRA with the information needed to determine your eligibility. At the end of the digital application, a PDF will be generated that your medical practitioner must print and sign.
Step 2 – Fill out Part A of Form T2201
Next, take the printed form from your medical practitioner and fill out the sections of Part A that apply to you. If you want us to adjust your previously filed tax returns, make sure to indicate it in question 3 of Part A.
Step 3 – Submit Form T2201
There are two ways you can submit Form T2201, as well as any related letter or document:
- The first is to submit electronically by using the "Submit documents" feature in My Account or Represent a Client
- Or, you can submit by mail to your nearest tax centre
Keep a copy for your records.
When completing the T2201 manually, the following steps apply:
Step 1 – Fill out Part A of Form T2201
Fill out the sections of Part A that apply to you. If you want us to adjust your tax returns, make sure to indicate it in question 3 of Part A.
Step 2 – Take the form to a medical practitioner who can certify the sections that apply. You may have to consult the list of medical practitioners that we shared earlier in the presentation.
Keep a copy for your records.
Once the CRA receives your application, the information provided will be reviewed in order to determine eligibility. They will then send you a notice of determination.
If the CRA determines that you're eligible for the DTC, you can claim the disability amount on your income tax and benefit return.
Note that if you were eligible for the DTC for previous years, but didn't claim the disability amount on your tax return, you can ask for adjustments to your tax returns for up to 9 previous years.
To claim the disability amount for past years, tick the box in Section 3 of Part A of Form T2201 when you apply and make sure you sign the form at the bottom of the page.
As we discussed, eligibility for the DTC is not solely based on the medical condition, but based on the effects of the impairment.
You can ask to have your file reviewed if you do not agree with our decision or if your medical condition changes. Be sure to include any relevant medical information that you have not already sent.
If you decide to ask for your file to be reviewed, keep the following in mind. Send any information that wasn't included the first time you sent in your application.
Make your request for a review within one year of the date of your notice of determination otherwise you will have to send us a new Form T2201.
As mentioned after your DTC application is approved, you can claim the disability amount on your return.
You can claim the disability amount for yourself, for a dependant, or for spouse or common-law partner.
If you're eligible for the DTC and you are 18 years or older, the amount you can claim on your 2021 tax return is $8,662.
If you're eligible for the DTC and were under 18 years of age at the end of the year, or if you are the parent of a child who is under 18 and is eligible for the DTC, you can claim up to an additional $5,053.
Please also note that provincial and territorial disability amounts and tax credit rates vary among provinces and territories.
Now, I want to give you some information on fees.
Please note that the CRA never charges a fee to process Form T2201.
However, your medical practitioner may charge you. And, you're responsible for any fee they charge to fill out Form T2201.
You may be able to claim that fee as a medical expense on your return.
You can also help us by doing your taxes…. On time! We know it's not a fun process and can be a bit scary for some.
But we want to stress how important it is to do your taxes.
Filing your taxes is the only way to get the many benefits and credits that are calculated based on your income.
We need the information in your taxes to calculate your payments—such as the Canada child benefit, the child disability benefit, and the GST/HST credit.
So even if you didn't earn any income in the year, we need this information.
The deadline to do your taxes is generally April 30 every year.
Filing by this day will allow us to calculate your payments and send them to you without delay.
You should also know that you don't have to wait until filing season to submit your T2201, Disability Tax Credit application. Submit your application at any time during the year to be able to claim the disability amount on your tax return.
Everyone should now agree that you have to do your taxes.
The fastest and easiest way to do your taxes is online. You can use tax software or a web application, available at the first web address shown on the screen.
The tax software:
- guides you through the process of doing your taxes.
- calculates everything for you.
- and helps make sure you don't miss out on any benefits and credits you may be eligible for.
- Some tax software are even free.
Now, you may not like using computers and that's okay. You can do your taxes on paper if you prefer. You will have to print the tax package for the province you live in at the second web address shown on the screen, or you can call the CRA to get one mailed to you.
If doing your taxes is a little too intimidating, you can find out if you're eligible for help at a free tax clinic. I'll tell you more about this service next.
As I just mentioned, you may be able to get your taxes done by a volunteer, for free! You're eligible for this service if you have a modest income and a simple tax situation.
Generally, you have a modest income if you have income of less than $35,000 for a single person and less than $45,000 for a couple.
Your tax situation is simple if you don't have a small business or income from a rental property.
Tax preparation clinics are held throughout the year. However, most clinics are offered in March and April.
During the pandemic, we have created virtual tax clinics to serve those who, due to the pandemic or other physical barriers, may not have access to an actual tax clinic location.
In the province of Quebec, volunteers do both federal and provincial taxes for eligible individuals.
For more information or to find a volunteer near you, go to the web address on the screen.
That concludes the webinar. We hope we helped you better understand the DTC and how to apply for it.
Thank you for joining us today.
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