Suffering from an impairment that affects your Walking may qualify for the Disability Tax Credit. How? Under the basic activity of daily living (BADL), Walking.
The Disability Tax Credit is a non-refundable tax credit (meaning your refund is based on your taxable income). It is unique in the sense that it is also retroactive up to 10 taxation years. The DTC is used to reduce the amount of income tax you owe and offset the costs of living with an impairment that affects you on a daily basis. The credit ranges from approx. $1,500-$2,500 per year depending on your province (as there is a federal amount as well as a provincial amount), as well as the amount of income tax you have paid.
When approved retroactively up to 10 years, again depending on a number of factors – this can result in a refund in the range of approx. $15,000 – $25,000 from the Canada Revenue Agency (CRA) paid directly to you. The refund you receive is not taxable as it is not income. It is a refund of taxes you have overpaid once the disability amount has been applied to your tax returns.
How do I qualify?
It is important to note that there is no master A-Z list of conditions that qualify for the credit. Eligibility is dependent upon how you are affected on a daily basis.
Generally speaking, you must:
1) The impairment must have lasted, OR is expected to last for a continuous period of at least 12 months.
2) You must be affected all, or substantially all of the time (typically referred to as at least 90% of the time).
3) You must require an inordinate amount of time to manage 1 or more functions of daily living. An inordinate amount of time means 3x longer than average person.
In this case, the function is Walking.
Do you take 3x longer than the average person to walk the distance of 100m, or 1 city block? If this is present at least 90% of the time, you would be considered Markedly Restricted in Walking. This would then qualify for the Disability Tax Credit.
Conditions that typically qualify may include but are not limited to (since eligibility is dependent upon how you are affected on a daily basis): Arthritis (various forms), Club Foot, Degenerative Disc Disease, COPD, Knee Problems / Replacements, Back Injuries, Herniated Discs.
I think I am eligible…what do I do?
Talk to your physician. In order to qualify for the credit, have your physician complete Form T2201.
Your physician’s role in this process is simply to provide factual medical information. The Canada Revenue Agency (CRA) will ultimately determine your eligibility. It does not have to be your general practitioner that completes your application. When qualifying under Walking, any medical doctor, nurse practitioner, occupational therapist, or physiotherapist can sign your application form.
Are there other benefits that are available?
Yes! Once qualified, the Disability Tax Credit can act as a gateway to open up several other support programs such as the Working Income Tax Benefit (WITB), Child Disability Benefit (CDB) as well as the Registered Disability Savings Plan (RDSP).
To learn more about the Disability Tax Credit, how it works and the eligibility requirements – you can review our page on the Disability Tax Credit.
What is the Registered Disability Savings Plan (RDSP)?
An RDSP is a one of a kind registered savings plan meant to help those living with disabilities plan for their financial future.
Account holders of an RDSP may be eligible for up to $70,000 in Grants and $20,000 in Bonds. This is over the lifetime of their RDSP account. Grants and bonds are dependent upon family net income. In many cases, it is possible to see thousands of dollars in bonds without having to make a single contribution to your RDSP account. At the very least, regardless of how much an individuals income may be – it possible to see 1:1 matching in grants vs contributions, so effectively 100% ROI, plus growth!
Contributions to the plan are not tax deductible, but the earnings grow tax free while held in the plan.
Are you eligible to claim the Disability Tax Credit? If so, open your Registered Disability Savings Pan today!