There are a host of deductions and credits available to people with disabilities or with family members who are disabled. These programs are somewhat confusing as use of one credit often cancels another, some credits have different income tests and some other unrelated deductions or credits claw into the availability of these credits. Prior to listing the available options, you must determine if you or someone related to you is disabled for tax purposes. Historically, the criteria have been fairly stringent. Because you are disabled for private or CPP disability pension purposes does not make you disabled for the purposes of tax deductions and credits. In order to claim any of these credits, you must have a disability, which markedly restricts your basic living activities.
The basic Disability Credit is available to anyone who meets the criteria established in form T2201. A qualified medical practitioner must sign this form. The qualified practitioner must be a medical doctor, optometrist, audiologist, occupational therapist or psychologist. The forms will be reviewed and may be disallowed by CRA if they determine you do not qualify.
If a relative you support, including your spouse, child, grandchild, parent, grandparent, sibling, aunt, uncle, niece or nephew qualify for the credit, but do not have enough earned income to be able to use the credit, it may be transferred to your tax return.
Child Care Expenses are enhanced for children who qualify for the disability amount. The $7,000 annual limit is increased to $11,000 for children up to 17 years of age.
The Amount for Infirm Dependents 18 years and older is a further credit available to disabled children over the age of 18. If your child is disabled and you do not claim that child as an eligible dependent (formally equivalent to spouse), you may make a claim for this credit. The maximum credit is $6,700.
This credit is also available if you support your or your spouse’s parent, grandparent, grandchild, uncle, aunt, niece or nephew. The dependent must reside in Canada, be dependent on you for support, but not necessarily reside with you.
The Caregiver Amount is a $4,667 credit available, if you support a relative over the age of 18 and that person resides with you. This credit is clawed back once the dependent’s income reaches $16,163. This credit is not available if you claim an amount for infirm dependents over 18 or a credit for eligible dependents for this individual.
The Disability Supports Deduction is a deduction to allow a disabled person to earn income. It is limited to the income you earn and includes expenses such as: sign-language interpretation, teletypewriters, speech synthesizers, note taking services and attendant care. In many instances, these expenses may also qualify as medical expenses and may be more beneficial to claim them there. You would need to work out the calculations for your particular situation.
There are other items affected by disabilities:
- There is a waiver of the five year qualifying period for the Home Buyers Plan to purchase a new home as long as the new home was better suited to the person with the disability who will reside there.
- There is an enhanced education credit for students with disabilities who attend post secondary education on a part time basis.
- You may qualify for EI benefits for up to six weeks to care for an ill member of your family.
- The Child Disability Benefit (CDB) is a recently introduced supplement to the Child Tax Benefit (CTB). The supplement is in addition to the normal CTB and is payable to a maximum amount of $227 per month per child who otherwise qualifies for the basic disability credit. The amount is reduced for family income over $65,000 and depends upon the number of disabled children in the family.
- CRA publishes a detailed guide with many examples of different situations concerning disabilities.
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