CRA explains the Disability Tax Credit

Joeita Gupta:
I'm Joeita Gupta, and this is The Pulse. It's the best of times and the worst of times. I'm talking of course about tax season. As Winter melts into Spring, Canadians from coast to coast start to gather their T-4s, apply for government deductions, and race to meet the April 30th income tax filing deadline. It can get stressful, but there is a silver lining. It's an opportunity to apply for government tax credits, especially if you have a disability. In recognition of the impact of living with a disability, the government of Canada has several programs designed to reduce the tax burden on Canadians with disabilities, but even the great Albert Einstein once admitted, the hardest thing to understand in the world is the income tax. With that in mind, today we discuss the disability tax credit. It's time to put your finger on the pulse.
Hello and welcome to The Pulse on AMI audio. I'm Joeita Gupta and I'm joining you today from the Accessible Media Studios in downtown Toronto. We're talking in preparation for tax season about the disability tax credit and my guest today is Gurpreet Plaha who is a Canada Revenue Agency spokesperson. Gurpreet Plaha, hello and welcome to The Pulse. It's really great to have you on the program.

Gurpreet Plaha:
Hi Joeita, it's a pleasure to be here today as well.

Joeita Gupta:
Tell me a little bit about the disability tax credit for those of us who haven't heard about it before. What exactly is it?

Gurpreet Plaha:
Disability tax credit, commonly known as DTC, it is a non-refundable tax credit that people with physical or mental impairment or their supporting family members can claim to reduce their tax liability. In simple terms, the non-refundable tax credit is like a coupon or a gift card that you can use to reduce the amount that you have to pay. It works for the same mechanism and then it reduces your tax liability, but it doesn't have any cash value.

Joeita Gupta:
Who, or I should say what kinds of disabilities would you say are eligible for the disability tax credit?

Gurpreet Plaha:
Right, so there are about nine categories that are eligible for disability tax credit and these are walking, mental functions, hearing, feeding, eliminating vision, and speaking as well, and also life-sustaining therapies as well. All of these disabilities are eligible to be claimed for disability tax credit and if a person who is claiming the disability tax credit can't use the entire amount or not use the amount at all because they're making low or no income, they do have an option to transfer it to one of their family members as well.

Joeita Gupta:
Let me pick up on that a little bit. Does the disability tax credit also apply to children or people under the age of 18?

Gurpreet Plaha:
Absolutely it does. Disability tax credit can be claimed for people over the age of 18 and under 18 as well. The amount that they can claim for individuals over the age of 18 is a little over $8,800 for this 2022 tax year. If you are someone who's under the age of 18, you get additional five grand on top of that as well. Basically you could claim for individuals under 18 to $14,000 in disability tax credits.

Joeita Gupta:
Of course, if you're under the age of 18, presumably you are not working and don't have income tax to pay, your parents would be able to use that deduction, is that correct?

Gurpreet Plaha:
That's that is correct. You could transfer it to your parents as well.

Joeita Gupta:
Right. Now parents also are entitled to things like the child tax benefit. Is eligibility for the child tax benefit in any way affected if you claim the disability tax credit on behalf of your child?

Gurpreet Plaha:
If you are claiming disability tax credit, it does not impact any other benefits such as your child tax benefit that you are actually referring to. It does not impact any other benefits.

Joeita Gupta:
Oh, that's good to know. I think a lot of parents would be relieved to hear that. If you look at the other end of the spectrum though, again, if someone is over the age of 65, are they still eligible for the disability tax credit because they get other things, they get CPPUAS and all kinds of things, are they still entitled to get the disability tax credit?

Gurpreet Plaha:
If you are over the age of 65, there are other benefits that government offers like CPP disability benefits and also the old age security as well. So you could continue to claim the disability tax credit as long as you're eligible for it. There are some cases where you would have to renew, the application does expire and then we would have to renew and see if you're still eligible to claim that credit, you can continue claiming that.

Joeita Gupta:
That's interesting because my mom applied for the disability tax credit for me, I'm not 65. I've got a ways to go, but she claimed it about, I want to say 10 to 10 to 15 years ago now and I've never had to renew it. Under what circumstances would you say someone needs to renew their eligibility for the disability tax credit?

Gurpreet Plaha:
If their conditions improve over time with therapy or medication or some or there are some changes. That is a time when someone has to renew their disability application with us, but if it is something that continues then you never have to renew the disability tax credit.

Joeita Gupta:
Gurpreet, you've made me very happy. I'm glad to hear I don't have to do more paperwork. I just want to pick up on the, go back to the 65 plus argument. You mentioned when we were talking about kids under the age of 18 that parents could take the disability tax credit because their kids don't have an income or don't have to file income tax for that matter, but if you are over the age of 65 and you no longer work, you're retired, is it possible for you to allow a family member to claim the deduction on your behalf or because it could be just be any family member or are there stipulations of the family member who is claiming the deduction has to be a caregiver for you or something like that?

Gurpreet Plaha:
There are two things. There's a disability tax credit that you could transfer to a family member and there's also a Canada caregiver amount as well that can be claimed by individuals who are taking care of an eligible dependent. Disability tax credit, yes, you can transfer and also the Canada caregiver amount is also something that you can claim for anyone. It doesn't have to be immediate family member. So anything that you're caring for your child, grandchild, parent, your brother or sister nephew or nieces that you can claim the caregiver amount on your income tax return as well.

Joeita Gupta:
You've mentioned a couple of other programs and I'm going to get to them in a minute but I should have asked this earlier, but I'm going to ask you now, how does someone go about applying for the disability tax credit? What do you need to do?

Gurpreet Plaha:
You can apply the for the DTC through digital means as well. When using the digital application, you first need to ask your medical practitioner to fill in the part B of the form. The form is called T2201 and it is available on our website to access, it's in PDF and fillable PDF form, but digital application, your medical practitioner can access it online and they can fill the part B and sign it, certify it, and then give it back to you where then you will fill the part A, which is your information, very simplified, a way to fill in your information and also if you want to authorize someone to speak on your behalf or if you want to transfer that amount to someone, you can also add that information in part A fill that application. If you have access to CRA's online account, which is called my account for individuals, it actually makes it really easy to file the application that way.

Joeita Gupta:
You mentioned a medical practitioner and I'm going to ask you because I suspect this would be the case for any medical documentation that we would have to submit to the CRA, who exactly is a medical practitioner for the purposes of applying for the DTC? Does it have to be a specialist? Can it be a family doctor? If you don't have a family doctor, as many people don't, can you get a doctor at a walk-in clinic to fill this out for you?

Gurpreet Plaha:
Yeah, so medical practitioners, generally the doctors would qualify in a bigger umbrella that covers most of the disabilities. For example, if it is a specific related to hearing vision or a speech and then a pathologist, audiologist can help you make that certification on your part B of the form as well. It does depend, but general doctors or medical practitioners, they do cover a bigger umbrella for these disability tax credits.

Joeita Gupta:
Let's say we get our doctors to fill out the form and we fill out part A, we submit to you digitally. How long is it before we hear back one way or the other about whether we got the disability tax credit or not?

Gurpreet Plaha:
Generally, the timeframe is eight weeks to process the application provided that all the information is complete and correct and we do not require additional information. Now, if there's something that's missing and we need more information from either from your doctor or yourself, we would connect with you but it will delay the application review process as well. Whenever you're filing, just make sure everything is filled, there's no missing information, the forms are filled correctly and file as soon as possible.

Joeita Gupta:
I think a lot of people might be wondering, "Oh geez, I think I might have been eligible for this disability tax credit but I've never heard about it before." Is it possible to apply retroactively? Can you go back and ask for the credit if you were eligible say for the last 5 years or 10 years, the last 20 years?

Gurpreet Plaha:
There is a mechanism to apply the disability tax credit to previous years as well. You could go back up to 10 years but your doctors have to certify that the condition existed in the previous years. When you are filling in the forms, your doctor would just have to put in the date since the condition started and you can go those many years back up to the 10 years.

Joeita Gupta:
That's good to know. I mean there might be someone who will be very happy because they'll get, I don't know, several thousand dollars in one shot because they got the disability tax credit.

Gurpreet Plaha:
Absolutely.

Joeita Gupta:
If someone is denied the disability tax credit and they feel that they should not have been denied, what kind of an appeals process exists?

Gurpreet Plaha:
If your application is denied, we will issue you a notice of determination that would explain the reasons why the application was denied and if you're not satisfied with the reasons, you can give us a call and ask questions or clarifications on that and then if that doesn't help or your medical information changes or you didn't provide some medical information on the form, it's missing, you can provide us with the new updated medical reports or a letter from your medical practitioner and we would review it again and then make the determination based on that information.

Joeita Gupta:
It's now about two months away from April 30th, 2023, that's the deadline by which people have to file their income tax. If someone were to, I don't know, apply today for the disability tax credit, do you think they'd get a decision back by in time to file their income tax and avail themselves with this credit?

Gurpreet Plaha:
That'll be something hard to say, but you should apply for a disability tax credit as soon as possible any time during the year. The sooner it is, the better the chances that it will be included within your tax return for this year. Now, I did say that it takes about eight weeks to complete the review of the application and now that's provided all the information is there, nothing is missing. We're cutting close to March and April. I would say if you're thinking of applying for D disability tax credit, do it as soon as possible but don't wait to file your return for the application to happen because if you don't file your income tax return on file, there are other government benefits that could be stopped or delayed because we haven't received your income tax return such as your GST tax credit or your Canada Child benefit that you might be depending on. Those are the benefits that would be delayed if you don't file your income taxes on time. I would say just file for disability tax credit application as soon as possible, but don't delay filing your income tax return.

Joeita Gupta:
Don't just wait and see let's if I get a decision back on the DTC and then wait to file, otherwise you could miss out on some of those other benefits. Let's talk about a few of those other benefits. Earlier in our conversation you mentioned a benefit for caregivers. Could you expand a little bit on what that benefit is and who is eligible?

Gurpreet Plaha:
It is the Canada caregiver amount that I was referring to. It is also a non-refundable tax credit. It's the credit for those who support a spouse or a Kamala partner or a dependent with any kind of disability. The credit can also be claimed for a child, a grandchild, a parent, grandfather, your brother, sister, uncle, aunt, nieces or nephews. It does expand to extended family as well. When an individual is considered dependent on someone for support, if they rely on regularly for provide them with some basic necessities of life such as food, shelter, or clothing, they would be eligible to claim that caregiver amount. Now we could ask you for an assigned statement for the individual from a medical practitioner showing that there is an impairment and they need some care from you. If you are already approved for a disability tax credit, then you don't need to provide any additional documentation to be eligible for that.

Joeita Gupta:
Right. Just so I'm clear, if someone has applied for and has been approved for the disability tax credit, then their caregiver can apply for this caregiver benefit automatically, they don't have to do anything,

Gurpreet Plaha:
Right. That is correct. There is also a mechanism on the form to list that caregiver so that they can transfer this amount as well or they can claim that amount as well. That is something that we could crosscheck as well if they are listed to be claiming that.

Joeita Gupta:
What if someone has not applied for the disability tax credit or you can get into situations where maybe someone isn't eligible for disability, the disability tax credit because you don't meet the eligibility criteria but you're still very sick and you have someone, a family member taking care of you. I'm sure you get the odd situation here or there. What happens in that scenario where a person is not eligible for the disability tax credit but their caregiver might want to apply for the caregiver benefit?

Gurpreet Plaha:
In those scenarios, all we need is a letter from the medical practitioner just showing that when what kind of impairment it is and when it started and what is the duration of the impairment and how long it's expected to be so that we can determine the eligibility for that individual to claim that caregiver amount.

Joeita Gupta:
That's really great. How long does a decision take on that and is there an appeals process if they get turned down?

Gurpreet Plaha:
There is appeals process for everything that is on your income tax return. Once you receive a notice of assessment and if you don't agree with the amounts or the assessment that is assessed, you do have the right to file for an objection and get asked for more explanation as well the reasons why we disallowed or why we denied this credit. Maybe it's we needed more information on that or maybe something was missing. Once you have that, you can provide that information accordingly.

Joeita Gupta:
You've also talked about, and I wanted to get your expert opinion on this, the CPP disability program. We've got a few minutes left. Tell me a little bit about what that is actually.

Gurpreet Plaha:
CPP disability benefit is for people over 65 and it is in addition to that one, in addition to the CPP benefit, one could actually receive the GIC supplement as well, which is the monthly payment for a low-income old age security pensioners as well. Then old age security is something that they could get if you are 65 and older.

Joeita Gupta:
Is this a way to access the CPP program early? Because I know of a lot of people who are 62, 63 and they want to maybe retire early or they're forced to retire early because of sickness and acute health conditions, is that a scenario where the CPP disability credit would kick in?

Gurpreet Plaha:
There are some mechanisms if you are eligible for CPP and then early you want to tap into those, to those savings or to those CPP pensions. However, there's also another mechanism which is RDSP that also could come into Handy as well to provide you with some financial security as well.

Joeita Gupta:
Yeah, the RDSP is a really big thing. I'll try and get to it today, otherwise, we might have to bring somebody back to talk about it in detail. We talked a lot about people over the age of 65, but I just want to go back, we talked a little bit Gurpreet about children and you mentioned that children can also apply for and receive the disability tax credit and of course, there are other benefits for children as well. The child tax benefit is one that we all know about. If someone has a child with a disability, are there other government programs outside of the DTC that parents might be able to apply for?

Gurpreet Plaha:
All right, so in addition to the disability tax credit, there is child disability benefit as well that's available to the families who care for children under the 18 and are eligible for disability tax credit. It is a tax-free payment and you could get up to a little over $2,900 annually and if you are already receiving the child can child benefit for that child, you don't really need to apply for this disability benefit. You'll get it automatically. Now, the child benefit, it is paid monthly to the person who receives the Canada Child benefit.

Joeita Gupta:
That's really good to know. The one other thing I've been reading about, I should ask you before I go the usual questions. If you want to apply for all these benefits that you've just outlined again, what forms do you need to fill out on the CRA website? I'm assuming you'll need a doctor to sign off on them as well, correct?

Gurpreet Plaha:
If you're receiving the disability tax credit and the child is under the age of 18, so you'll automatically apply to-

Joeita Gupta:
Oh, okay.

Gurpreet Plaha:
Yeah, so there's not really an application process. If you are receiving the child, the Canada Child benefit and you're receiving the DTC, you could automatically be eligible for this benefit.

Joeita Gupta:
Okay, good. I just wanted to clarify because I always think, okay, more benefits equals more paperwork, so I'm glad I was able to dodge that bullet. I want to ask you in the minute or two that we have left, I've read a lot about government programs that provide tax deductions and rebates and credits and all kinds of things for people who engage in home renovations to allow a person with a disability to live at home. What kinds of programs exist to support people with disabilities living independently in their communities and what's the process to apply for some of these?

Gurpreet Plaha:
Right, so there are other benefits in addition to the DTC that we're talking about today. Home accessibility tax credit as you mentioned is something that comes to mind that people over the age of 65 or someone who's actually eligible for DTC can also claim for this amount. The expense amount is up to $20,000 if you use that amount to renovate your house or a place where you live in so that it's more accessible to your needs, you could claim up to $20,000 in expenses for that credit and all you have to do is apply for that credit on your income tax return when you are filing your income taxes, that's basically it.
Hang on to your receipt in case we come back and ask you for supporting documentation for those expenses, just make sure that you have them all organized and ready. In addition to that, there is also some medical expenses that people can claim as well to offset the tax liability. That is something also available. The other benefits in addition to that would be the GST or HST tax credit that they could be eligible. You don't need an extra application. All of this is with the mechanism of filing your income taxes on time.

Joeita Gupta:
Excellent. Really important to get that income tax filed on time. Gurpreet, if we want to follow up on any of what you've said and we want to read up more about some of the disability tax credits and some of the other benefits that you've outlined. Where do we go?

Gurpreet Plaha:
Our website is a pretty good source to get all this information on this. We have a page dedicated to the benefits that lists all the benefits. That one actually all kind of benefits that anybody could get from the government, either like mostly federal, but there could be some provincial benefits that are also you could be eligible for. Depending on the province that you live in, you can always give us a call as well. If you need more information. Our call sectors are open Monday to Friday, eight to eight and Saturdays nine to five as well. If you are actually looking for a more personalized information, CRA's online account is a great source of information that you could be looking at. For example, if you want to know when is your benefits coming there, we have a date listed there as well. And if you want to update any information that is also possible through the CRA's online account.

Joeita Gupta:
Gurpreet, it's been a real pleasure talking to you. This has to be the most fulsome explanation of the disability tax credit I have ever had. Thank you so much for speaking to me today.

Gurpreet Plaha:
No problem. It was my pleasure. Thank you for having me.

Joeita Gupta:
Gurpreet Plaha is a spokesperson for the Canada Revenue Agency and we talked about some of the benefits that people with disabilities are entitled to and we did a deep dive into the disability tax credit. I know the other thing that people have a lot of questions about is the RDSP program and I will try and bring somebody on from the CRA to talk about that as well because it is an excellent program. If you're eligible and you're able to open an RDSP account, it can make a huge difference to the ability of a person with a disability to save for the future. But we'll have to have that conversation in future. That's about as much time as we have for today.
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As I said, we've got to wrap up, but I hope everyone does well with their taxes and don't get too stressed out about it. I will try my best to bring somebody on to talk about the RDSP program as well, hopefully in a show in the near future. Our videographer today has been Ted Cooper. Mark Aflalo is our technical producer. Ryan Delehanty is the coordinator for podcast at AMI-audio. Andy Frank is the manager here at AMI-audio and I've been your host Joeita Gupta. Thanks for listening.