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Five Benefits of the Disability Tax Credit You Didn’t Know

November 17, 2016
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Canadian disability benefits disability benefits gatewayMany Canadians living with disabilities don’t take advantage of all the disability benefits available to them – largely because they aren’t widely known, often vary in eligibility guidelines and procedures, and are lengthy to apply.

So would you be surprised if we told you the Disability Tax Credit gives you access to 5 additional Canadian disability benefits?

1. Child Disability Benefit

This is a monthly tax-free income supplement available for children under 18. The Child Disability Benefit (CDB) can be worth up to $224.58 per month, and is yours to spend however you wish.

Like the Disability Tax Credit, CDB can be refunded retroactively up to 10 years!

2. Registered Disability Savings Plan

The Registered Disability Savings Plan (RDSP) is meant to help Canadians living with disabilities save money for their future. With the RDSP, contributed savings are not tax deductible, but the income inside the plan can grow, sheltered from tax until the funds are withdrawn.

You can also take advantage of the Canada Disability Savings Grant, in which the federal government contributes up to $3 for every $1 you save – up to $90,000.

If you belong to a low-income household, the Government of Canada will also pay a Canada Disability Savings Bond of up to $1,000 a year (up to $20,000) directly into your RDSP.

3. Home Buyers’ Amount

If you or a family member have been approved for the Disability Tax Credit, you can potentially claim $5,000 in your income tax deductions.

If you make renovations to make your home more accessible for your disability (for example, adding a ramp if you have a walking impairment), you can also claim the Home Accessibility Tax Credit – 15% of eligible expenditures (up to $10,000) in your annual tax return.

4. Canada Pension Plan-Disability

If you contributed to the Canadian Pension Plan and are approved for the Disability Tax Credit, you can get a monthly benefit called the Canada Pension Plan-Disability (CPP-D).

CPP-D is considered taxable income, meant to support Canadians who are no longer able to work regularly because of their disability. There are no restrictions, so you may use this benefit however you wish.

Since the Disability Tax Credit is meant to reduce income tax payable, you can claim the DTC to off-put the taxable CPP-D that you receive.

5. Working Income Tax Benefit Supplement

If you are already eligible to claim the Working Income Tax Benefit (WITB), a refundable tax credit, the Disability Tax Credit gives you access to the WITB disability supplement. This is an additional percentage of your income that you can claim on your income taxes.

These benefits can only be accessed once you’ve been approved for the Disability Tax Credit,making the DTC a “gateway” tax credit.

If you haven’t been approved for the Disability Tax Credit, and want more information, learn more here, or subscribe to our newsletters for tips, guides and how-to’s.

And don’t hesitate to arrange a free consultation if you have any questions about how we can help you apply for the Disability Tax Credit.