By Peter J. Manastyrsky
Many people in our society who have suffered a debilitating illness for an extended period have missed out on one or more of the yearly disability credit benefits available to them at tax time.
The disability tax credit is a non-refundable credit that reduces current taxes by as much as $2,500 a year for those who qualify or for a supporting relative—or to the full amount of the individual’s tax liability in that tax year.
The disability tax credit is available to Canadians who are deemed to have “one or more ailments that impact the activities of daily living, where those ailments are not likely to get better any time soon and have already been in place for a period of at least one year.” The credit is transferable in full or in part to a caregiver if the disabled person is not liable for taxes equal to the full amount of his credit entitlement.
This tax credit is extremely powerful. In the event one qualifies for the disability tax credit, a person can claim a credit amount going back as many as 10 tax years to the date of impairment (based on income in each of those years) and potentially receive substantial dollars in refunded taxes.
It’s to your advantage to use this credit. It has been calculated that applicants could be eligible for as much as $20,000 in compensation for current and back tax payments.
Please make note that Canada Revenue Agency lists the following as examples of the types of impairments that could quality for the disability tax credit: disabilities that cause the applicant to be markedly restricted in speaking, vision, hearing, walking, bladder or bowel function, feeding, dressing, life-sustaining therapy and mental function necessary for everyday life.”
The physical or mental impairment must have lasted, or be expected to last, 12 months or longer, and must be severe, such that it restricts the individual all, or substantially all, of the time. Disability means being disabled or unable to work, function or be productive; the credit recognizes the extra challenges faced by Canadians with impairments.
Peter J. Manastyrsky, a retired educator, has been assisting individuals in applying for the DTC since before 2007 when he founded A Step Beyond and Associate. His company is affiliated with the Better Business Bureau. He can be reached at 204-663-4651, or visit his website at http://www.astepbeyond.cc.