Many children with parents with developmental and cognitive disabilities are not sure if they qualify for disability tax credit. Getting to know more about tax credits is important to lower income tax. The filing process is confusing as there is a lot of difference on how a physician fills a form and how civil servants process forms. Though, there are professionals that guide you in this process. http://www.disabilitydreams.ca/ is one such service that can get you what is your due. American Academy of Child & Adolescent Psychiatry is an international organization, and online registrations are accepted at Aacap.org.
Apart from cutting down on taxes, it can also help you qualify for Registered Disability Savings Plan (RDSP). To qualify for this benefit, the person must have an impairment that lasts at least for one year. RDSP is a special program for Canadians with a disability to meet their financial needs from long-term disability. It can help handle their living cost and medical expenses for the future.
What is Disability Amount?
People with disability can find disability amount useful as it a tax credit helping cutting down on income tax. Once you qualify for the disability amount your spouse, or other supporting members of the family can use a part of the amount to reduce federal income tax. In case you or your family member paid for the care at the hospital or other institution then you become eligible to claim the medical expenses. In some cases, both medical expenses and disability amount can be claimed.
How to claim the Disability Amount?
Disability Tax Credit Certificate or Form T2201 can be used to claim disability amount. If you were eligible for the amount last year, you still stand a chance to claim it for the current year without the need for Form T2201.
Applying for Disability Tax Credit (DTC)
The form T2201 is available online at http://www.cra-arc.gc.ca. The form has to be filled by your physician for which you may be charged. Call and make an appointment with your doctor and get the form filled. The practitioner has to sign the form and go through the content, if you are not happy with it, you can always get another practitioner for help. The signed form has to be sent to the Canada Revenue Agency Tax Centre located at your closest destination.
How to transfer unused Disability Amount?
A disabled person may not require the entire disability amount to cut down on income tax to zero. In such cases, your spouse or any person who supports you can make use of the unused disability amount. The supporting person can either be your spouse, blood relation or adopted. The disability amount can be used by the supporting person if the disabled person is completely dependent on them or they can hold custody in case the disabled person is less than 18 years of age. Others who qualify for the amount include your spouse, spouse’s child, adopted child or child’s spouse.
If the disabled person is supported by more than one person, all can claim the unused tax credits. However, the unclaimed amount will be equally divided among the supporting persons. Which means the total claimed amount cannot be more than the unused disability amount.