The Disability Tax Credit
There are lots of advertisements in the media about the Disability Tax Credit. It's true, many people may qualify but don’t even know it because it can be confusing. And many people don’t consider themselves “disabled” so don’t want to apply for it.
I have even heard someone say that if they are approved, their driver’s license will be cancelled. This is absolutely not true. I have many clients that have qualified for the Disability Tax Credit that still have valid driver’s licences.
I recommend anyone who is unsure, to apply for it. It's better to try then to not try at all. In addition to you completing the application, it does get completed by your doctor and Canada Revenue Agency has the final say as to whether you are approved.
There are many reasons why someone may qualify for the disability tax credit.
The most common reason is mobility.
As we get older, there are many reasons why we have difficulty walking: arthritis in the knees, heart condition or lung conditions (COPD or Emphysema) or severe back pain often reduce the ability to walk.
So what qualifies as "limited mobility"? Generally it's the inability to walk about 100 meters or about one city block because you have to stop due to pain or shortness of breath or because of fatigue; or that it takes "an inordinate amount of time" (inordinate = excessive, unreasonable). Does it take you a lot longer to walk compared to someone your own age with no impairment?
There are many other impairments that may qualify for the Disability Tax Credit:
Hearing - it needs to be quite hard of hearing, even with hearing aids; generally if I have you in my quiet office if we still have a difficult time having a conversation because I have to speak louder and often repeat myself, then you likely qualify.
Bladder or Bowel Control: if someone has a colostomy bag they likely qualify. Digestive disorders such as Inflammatory Bowel Disorder or Colitis or Enlarged Prostate may also impair your bowel or bladder function and you may qualify.
Mental functions for everyday life: what may qualify is memory loss from Dementia or Alzheimer's or head injury; or severe depression, bipolar disorder, anxiety or even severe ADHD.
Visual impairment: Can be from Age-Related Macular Degeneration, Cataracts, Diabetic Retinotherapy, Glaucoma, Myopia, Retinis Pigmentosa. You need to be visually impaired in both eyes (one blind eye will not qualify you).
The impairment must be most of the time (90%) and for a continuous period of 12 months or more. So if I break my leg, I may have restricted mobility for a period of time, but I would hope it would not last 12 months!
The Disability Tax Credit is a non-refundable tax credit. This means it reduces your taxes payable (you can check your taxes and look for line 435 taxes payable). The saving is up to $2,000 per year, depending on how much tax you paid.
For couples, if the spouse claiming the disability tax credit has no or very little taxes payable, the unused credit can be transferred to the other spouse to reduce their taxes payable.
We can adjust up to 10 year back, so if you qualified since 2007, we can go back to 2007 to 2016 and adjust your taxes.
In Manitoba, even if you pay no taxes, you may be eligible for provincial credits ($113/year); this may not seem like a lot, but I have adjusted 10 years for some people who only get $113/year and that means over $1100 in their pockets. They are very happy to receive this payment.
There may be situations where another family member is financially supporting the individual that qualifies for the disability tax credit. If so, the supporting family member (parent, child, sibling or others) can have the unused disability amount transferred to them and receive the tax refund.
Children can qualify for the disability tax credit, too, and there are additional credits available to parents through the Canada Child Benefit.
We encourage you to contact our office if you think you may qualify. We can review the form with you and provide information to your doctor to identify and explain the areas of daily living activities that are being affected and how you may be eligible.
A quick reminder that you have until April 30 to file your income taxes for the 2017 tax year. If you or your spouse are self-employed, you have until June 15 2018. If you are missing tax slips, we can often retrieve them from Canada Revenue Agency with your signed authorization.
Anni Markmann is a Personal Income Tax Professional and Certified Financial Planner; living, working, and volunteering in our community. Contact her at 204.422.6631 or 36 Dawson Road in Ste Anne (near Co-op) or Info@SteAnneTaxService.ca