Tax Breaks for Canadian Families, Children with Disabilities

It is costly to raise children in Canada. Families that care for children with disabilities can quickly become overwhelmed by expenses. Taking care of a child with disability requires special assistance in various ways. The exact need of a child with disability is unique to his or her particular condition.

Oftentimes, cost of care and disability assistance puts families that have children with disabilities at financial disadvantages. In an attempt to address this reality, Canadian government put a tax credit in place to assist with these unique situations.

The government’s goal with disability tax credits is to alleviate the financial burdens families assume when raising children with disabilities. One tax deduction available is the Child Disability Benefit. Below are some details to help you understand and apply for the benefit, if you are in fact eligible.

Qualifying for the Child Disability Benefit

If you are a resident in Canada and have a child who is living with a disability, you may be able to apply for the tax breaks government offers. To be eligible for the Child Disability Benefit, otherwise known as CDB, the child in question must be younger than 18-years-old and the disability must be certified by a medical professional. The impairment or condition can be mental or physical. In addition, the disability must be prolonged, which means that the child has struggled with the impairment for at least 12 months.

How to Apply for Disability Tax Credits

As with all disability tax credits, the medical practitioner plays a crucial role in deciding whether or not a child will qualify for financial benefits. Before consulting a physician, the parent, guardian or caregiver of the child must obtain a T2201 form, the Disability Tax Credit Certificate. This form must be filled out and signed by a qualified medical practitioner. The practitioner is required to assess the child’s condition and confirm that he or she is indeed living with a severe, prolonged disability.

Depending on which practitioner you go to, fees may be charged for completing the assessment. While these charges are the responsibility of the family applying for the tax benefit, they are a small cost that may lead to years of tax breaks and retroactive payments.

Once the form is filled out and signed by the medical practitioner, it should be submitted to the Canada Revenue Agency (CRA) for approval. Unfortunately, too many Disability Tax Credit Certificates are denied, leaving Canadian families without the support they need.

It is possible to submit successful applications with the help of benefit specialists like The National Benefit Authority. After an application is approved by the CRA, benefit specialists are able to ensure Canadian families get the full amount of money they are entitled to from government, including retroactive payments.

How Are Benefits Calculated?

When applying for the Child Disability Benefit, you will be required to give the CRA information concerning your adjusted family income. The benefit is calculated using a base amount (which takes into consideration the family size) so that if your family net income falls below the base level, you may receive the full Child Disability Benefit amount. The calculation also takes into consideration the number of children whom you want to be considered for the tax benefit. Currently, the amount can go up to $2,650 per year for each child who is approved.

Unfortunately, if your adjusted family net income is more than the base amount, you may receive a lower disability benefit. However, benefit specialists at the National Benefit Authority can help families in all tax brackets realize how much they may receive in retroactive payments. This amount can reach up to $40,000 for any applicant.

Get More Information!

For a family that wants to know if they may be eligible for the Child Disability Benefit, the first thing to do is explore the Disability Tax Credit Certificate. However, do not become alarmed if the form seems confusing at first. A lot of people feel this way. To receive understanding, assistance filing T2201 forms and claiming retroactive disability benefits for you or your children, contact The National Benefit Authority.