Many Canadians with disabilities are missing out on money for which they are eligible. According to the Canada Revenue Agency, about 1.1 million Canadians can claim disability tax credit. However, the CRA says that just 620,000 people claim the tax credit. This means that around 480,000 people are missing out on a benefit that could help them. The disability tax credit is designed to help people with a prolonged and severe impairment to their physical or mental health. In 2015, claimants to claim up to $7,899, potentially saving them up to $1,800 on their taxes. It is also possible to claim a further amount if the person is claiming for a dependent under 18.
The reason many Canadians are missing out is that many find applying complicated. Some people might assume that they are ineligible for the tax credit without applying. Others don’t know how to access the benefit. Some can also struggle to fill out the necessary disability tax credit form. To be assessed for the disability tax credit, it’s necessary to complete the T2201 form. Many people seek help from a lawyer or a service designed to walk them through the process. The companies that can help people to apply usually take a percentage of the money claimed. Regulations for the industry have yet to be put in place as it is relatively new.
The process to decide if someone is eligible for disability tax credit can be complicated. There are eight categories of disability. A successful claimant could be severely restricted in one area. Or they could be significantly impaired in several of them. Anyone applying for the benefit cannot fill out the whole form on their own. A doctor or other health provider must complete part of the form and some sections may require a specialist. The applicant might have to pay their medical practitioner for this service. This can put some people off.
Some people might not apply for the tax credit because they don’t pay enough tax. They can feel that there is no benefit for them. However, it is necessary to apply to get other benefits. It allows people access to the Registered Disabilities Savings Plan. This helps disabled people with lower incomes to save for retirement. It enables them to get grants and bonds to top up the money they save. Those who don’t have low incomes can benefit from opening an account too. The government will match their annual contributions up to $1,000.
There are also other ways to save on taxes and other expenses for Canadians with disabilities. If anyone is unsure of what they are eligible for, they can use a service that will help them. It is also possible to find free information online, which can help people to understand the benefits available to them. It can also be possible to access free services that can give advice.
Disability tax credit for can help with the financial burden of having a disability. Combined with other benefits, it can boost income and savings.