Questions and answers to the Disability Tax Credit Promoters Restrictions Regulations
Due to a court injunction, the Disability Tax Credit Promoters Restrictions Regulations are suspended until further notice.
Q1: What is the purpose of the Disability Tax Credit Promoters Restriction Act (DTCPRA)?
The DTCPRA (the Act) was enacted to limit the fees that can be accepted or charged, directly or indirectly, by a promoter who makes a disability tax credit request under the Income Tax Act on behalf of a claimant. The policy intent of the Act is to ensure that the income tax refunds generated by claiming the disability tax credit (DTC) and any other DTC related credits or benefits, which are intended to compensate for some of the additional expenses assumed as a result of living with a disability, leave more money in the hands of persons with disabilities and their supporting family members.
A claimant is an individual who is the subject of a DTC request or who has a dependant on behalf of whom a DTC request is made. The maximum fee that a promoter can accept or charge for these services is set by the Regulations.
Q2: What is the purpose of the Regulations?
The Regulations set the maximum fee that can be charged by a promoter for assisting in the making of a disability tax credit request under the Income Tax Act.
Q3: When is the legislation coming into force?
The Disability Tax Credit Promoters Restrictions Act and the Regulations will come into force on November 15, 2021.The delay between publication in the Canada Gazette and the coming into force date is to allow promoters time to complete existing contracts.
Q4: Do the regulations apply to the Quebec provincial form?
No. The CRA regulations apply only to the federal DTC program and form. For the purposes of the Disability Tax Credit Promoters Restrictions Act, a DTC request relates to requests for the federal disability-related tax credits and to the provincial-territorial credits (excluding Quebec where residents have to file a separate Certificate Respecting an Impairment directly with Revenu Québec).
Q5: Has the Disability Advisory Committee been consulted on the Regulations?
Yes. The Disability Advisory Committee (DAC) was consulted on the proposed Regulations in October 2018. The final Regulations respond to the DAC’s recommendation that there be a cap placed on the fees that promoters can charge for assisting a person to make a DTC request.
The DAC was reinstated by the Minister of National Revenue, the Honourable Diane Lebouthillier, in November 2017 after being disbanded in 2006, to provide advice on issues like these.
Q6: Why a flat rate instead of applying a percentage?
The decision to apply a flat rate was based on the comments and feedback received from stakeholders in previous consultations. To arrive at this decision, the CRA analyzed various options, including: a fee based on a percentage of the tax refund; an hourly rate; and fixed dollar amount fee. After considering the advantages and disadvantages of each, the DAC indicated it preferred the fixed dollar amount, or flat rate option.
Q7: What does the $100 include?
The Regulations establish the maximum fee that a promoter can accept or charge in respect of a DTC request as:
- $100 for a request made for a determination of disability tax credit eligibility – helping to complete the T2201 – Disability Tax Credit Certificate; and
- $100 per taxation year for assisting the individual or a family member request a reassessment, for up to nine prior taxation years, in addition to the current taxation year, should they wish to amend a prior year’s tax return, which may result in a refund of taxes paid in these previous years. This can be done by submitting either a T1 Adjustment Request – T1ADJ or a signed letter to the CRA.
It is important to note that the cap does not impact how much tax preparers charge for preparing taxes and providing advice, beyond the adjustments that are required for claiming the DTC.
Q8: If an individual is denied eligibility for the DTC, does the $100 fee include help from the promoter to appeal the determination?
The $100 fee includes assistance provided by a promoter in requesting a redetermination of eligibility for the DTC by the CRA. It does not include assistance provided by a promoter in filing an appeal with the Tax Court of Canada.
Q9: Are the fees fair value for the work and services provided by the promoter?
The Disability Tax Credit Promoters Restriction Act 2014 consultations determined these fees to be fair. They were based on consultations with Canadians, including tax preparers and accountants. The fees are consistent with fees charged by tax preparers and tax professionals.
Q10: Can a promoter still charge me for their services after I receive my refund or will I be required to pay up front?
The Regulations do not limit which pricing policy approach is used – either upfront fees or contingency fee pricing can be used as long as it doesn’t exceed the maximum allowable fee.
Q11: What are the penalties/sanctions for overcharging?
Section 3 of the Act sets out the penalty for a promoter who overcharges for providing assistance in completing a DTC request. The minimum penalty for overcharging is $1,000. If the promoter fails to notify the Minister of an overcharge, there is an additional fine of not less than $1,000 and not more than $25,000, in addition to any penalty otherwise provided.
Q12: What can be submitted as proof that an individual was overcharged?
If an individual is overcharged after the Regulations come into force on November 15, 2021, and the promoter does not reimburse the individual, the individual can send the CRA a statement of account or a receipt that shows the amount paid to the promoter.
Q13: If an individual is overcharged, will they get their money back?
Any fee that an individual has paid over and above the prescribed amount may be reimbursed by the promoter.
Q14: If an individual reports a promoter who has overcharged them to the CRA, how long does a promoter have to return the overcharged fee, if they decide to do so?
If the promoter repays any excess fee within 120 days after providing notice to the CRA about accepting it, the repayment will be considered in determining the penalty to be imposed on the promoter. It is the responsibility of the individual to take further action if the promoter does not repay the overcharged fees.
Q15: When does the clock start on the 120 days?
After the Regulations come into force on November 15, 2021, the 120 days will start either:
- the day the promoter notifies the CRA that they overcharged a client, or
- the day the CRA contacts the promoter with proof from their client that they have been overcharged.
Q16: How can an individual notify the CRA that they have been overcharged?
If an individual is charged more than the maximum allowable fee after the Regulations come into force on November 15, 2021, they can send a letter to:
National Leads Centre
Canada Revenue Agency
200 Town Centre Court
Scarborough ON M1P 4Y3
Office hours: 8:15 am to 4:45 pm, Eastern time
Q17: How will the promoters self-report to the CRA that they have charged a fee higher than the amount prescribed by the Regulations?
Beginning on November 15, 2021, promoters can:
- Submit Form T930-Disabililty Tax Credit Promoter Excess Fee Notification, along with supporting documents (if any) by mail to:
- CRA-Benefit Partnerships and Service Division
Disability Tax Credit Modernization Section
750 Heron Road, Canada Post Place
Q18: Do the Regulations affect the fees that medical practitioners can charge?
Contrary to other professionals who assist their clients/patients in completing various forms for making a DTC request, medical practitioners, who only assist in the completion of Part B of the Form T2201, Disability Tax Credit Certificate are not considered to be promoters for the purpose of the Act. The fees that medical practitioners can charge are set by provincial regulations and medical associations.
Medical practitioners include medical doctors, nurse practitioners, speech-language pathologists and audiologists, occupational therapists, psychologists, optometrists and physiotherapists – who are all recognized under the Income Tax Act as qualified to attest to the claimant’s effects of impairment.
Q19: Is the CRA concerned about the impact the Regulations will have on promoters?
The CRA is aware that the Regulations may have an impact on the annual revenue of some promoters. The Act requires that the Regulations prescribe a maximum fee, and based on consultations with stakeholders, it is understood that the maximum fee could, in some instances, be lower than what some promoters currently charge.
The policy intent of the Act is to ensure that the income tax refunds generated by claiming the DTC and any other DTC related credits or benefits, which are intended to compensate for some of the additional expenses assumed as a result of living with a disability, leave more money in the hands of persons with disabilities and their supporting family members.
Q20: What steps are involved in making a disability tax credit request?
- Completion of Part A of Form T2201 - Disability Tax Credit Certificate by the taxpayer or an authorized representative;
- Completion of Part B of Form T2201 - Disability Tax Credit Certificate by the medical practitioner of the person with the disability;
- Filing of the completed Form T2201 – Disability Tax Credit Certificate with the CRA either by scanning the form and submitting it using "Submit documents" in either “My Account” or “Represent a Client”; or by mail to a designated tax centre; and
- Filing of a tax return to request an assessment relating to the DTC for the current taxation year and/or filing a reassessment request relating to the DTC for up to nine previous tax years or to claim any deduction or overpayment of tax that is contingent upon DTC eligibility.
Q21- Can an individual ask the CRA for help with an application instead of asking a promoter?
The CRA is available to answer all questions related to the DTC, including questions pertaining to the application process. This service has been improved with a telephone service specifically designed to address complex DTC-related questions. The enhanced telephone service (1-800-959-8281) allows Canadians to connect with call centre agents who can address complex DTC-related questions in one phone call.
Individuals can also receive assistance from the CRA’s Community Volunteer Income Tax Program and Outreach initiatives; both of which will also be able to help them with their DTC application.
Q22- Are the Regulations retroactive to when the Act was passed in Parliament?
No. Any enforcement of the maximum fee set by the Regulations will come into effect on November 15, 2021. This date is identified in Canada Gazette, Part II.
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