Common Questions About the Disability Tax Credit

The Disability Tax Credit opens doors for annual tax breaks, retroactive payments and other opportunities. Qualifying for the Disability Tax Credit means the Canada Revenue Agency recognizes your mental or physical challenge as a severe, prolonged disability. As a result, you become eligible to apply a credit to your income tax forms (or the forms of a supporting family member/caregiver). In addition, you qualify to request retroactive payments for up to 10 years of unpaid benefits. This can amount in up to $40,000.

Canadians have many options when it comes to disability support. If you are considering filing the Disability Tax Credit Certificate, you may have questions about the number of opportunities available to you. A lot of Canadians with disabilities have questions about how involvement in one program might affect their eligibility for the Disability Tax Credit. For instance:

If I qualify for other disability support programs (like ODSP) do I automatically qualify for the Disability Tax Credit?

No. The Disability Tax Credit is different from ODSP. It offers unique benefits and has different standards of acceptance. The Disability Tax Credit is not guaranteed just because another benefit opportunity has accepted you. You must apply for it and be as detailed as possible when filling out the application (also known as the T2201 form).

Why do I qualify for a disability pension plan and not qualify for the Disability Tax Credit?

Every organization and government sector has different definitions of the term”disability”. This is because each benefit program is established to meet unique needs of people with various types of disabilities. While a pension plan is meant to replace income, the Disability Tax Credit alleviates tax burdens. It decreases tax expenses and may increase tax refunds so that you receive money to supplement your income.

The same can be asked of workers compensation. However, the goal of workers compensation is to replace income. This goal differs from that of the Disability Tax Credit.

How is the Disability Tax Credit different from other disability support options?

Receiving a disability diagnosis does not qualify you for the Disability Tax Credit. The tax credit fulfils its sole purpose of offering financial relief by examining the impact a disability has on one’s day-to-day quality of life. To qualify for the Disability Tax Credit you must have a prolonged disability (12 months or longer) and your disability must restrict one or more aspects of daily living.

How do I know which benefits I am eligible to receive?

Filling out and submitting the T2201 form is the only way to find out if you qualify for the Disability Tax Credit. Take the first step in discovering what tax refunds are available to you by applying today.

With the help of The National Benefit Authority (NBA), you can grow your understanding of the Disability Tax Credit. Benefit specialists are available for free consultations so you can discuss your eligibility status openly and in a trusted environment. The NBA serves people with disabilities by guiding them through the process of applying for the Disability Tax Credit. With professional assistance, it is possible to access the money government has owes you.