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Tax Benefits For Disabled Persons

What Is The Disability Tax Credit Eligibility Criteria

IRS Tax Help for People With Disabilities
  • Mental illness and psychological impairments
  • Neurological impairments

As mentioned previously, being diagnosed with one of the following impairments does not make you eligible for the DTC. Considering, eligibility is based on the severity of the impairment and how it affects your ability to perform activities of daily living.

This section will cover each category and the common conditions that fall under them, which makes one eligible for the DTC.

Louis 58 From Quebec Suffering From Type 1 Diabetes

Louis suffers from Diabetes Type 1, which requires that he is injected with insulin 4 times per day and has his blood sugar checked every few hours. Disability Credit Canada worked with Louis physician to formulate a strong case on his behalf, where we detailed the amount of time, effort and activities Louis does on a daily basis and submitted that information to the CRA as part of Louis DTC application.

Louis DTC was approved he was found eligible to receive the DTC from 2000 to 2022 and he got $9,582.88 in retroactive refunds.

Help If Youre Employed

You may be able to top up a low salary by claiming Universal Credit.

You also might be able to get an Access to Work grant to pay for:

  • special equipment, adaptations or support worker services to help you do things like answer the phone or go to meetings
  • help getting to and from work
  • mental health support
  • communication support at a job interview

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What Is The Procedure For Claiming A Deduction Under Section 80u

As part of the application for deduction, a copy of the medical certificate issued by the medical authority must be submitted along with the ITR. Though the document is not required to be attached with the ITR, it is advised to keep it on hand in case of an emergency.

Note that the medical certificate must be submitted certifying the disability suffered. The medical certificate should be prepared by a recognized medical authority in a prescribed format which is contained in Form 10-IA. The form can be found on the income Tax India Website

Thus, If you are taking the deduction under this section, keep the certificate with you, which you can obtain from the Authorized Medical Practitioner.

In addition, it is recommended that medical prescriptions and medical records be kept safe in case the income tax department asks for them in the future.

A medical certificate should contain details about the taxpayers disability.

An expired disability certificate can be used to claim the deduction for that financial year if the validity of the certificate expires during that financial year. It is, however, necessary to obtain a new certificate to claim deductions under Section 80U in the next financial year.

Option : Completing The Disability Tax Credit Application On Your Own

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To apply for the Disability Tax Credit on your own, follow these steps:

  • Download theT2201 Form directly from theCRAswebsite. There they offer two versions of the Form:
  • The first is a simple PDF version , which can be printed and taken to your medical practitioner.
  • The second is a fillable PDF version , which can be filled out and certified directly from your computer or your doctors.
  • Complete the individual section, Part A of the form, then take it to your health care practitioner to fill out, and commission Part B.
  • Submit the certified T2201 form by mail to theCRAs processing centre.
  • The main benefit of taking this DIY route is the minimal cost associated with it. The only fee attached to applying independently is the one paid to the medical practitioner for filling out the form, which is usually a standard fee of $25 to $150.

    As per Ontario Medical AssociationsPhysicians Guide to Uninsured Services, This fee is capped at $44.95 for an authorized medical practitioner to fill out Part B of the form and certify your medical conditions, highlighted in Form T2201.

    However, there are a few drawbacks to the DIY approach, such as:

    NOTE: Although you are responsible for any fees that the medical practitioner charges you to fill out Form T2201. You may be able to claim those fees as a medical expense online 33099 or 33199 of your tax returns.

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    How To Apply For Council Tax Reduction For Disability

    You first need to find your local council. You may fill in a form, or do your application online. Some local councils also allow you to apply by phone. Find your local council website. From there, they will have instructions on how to apply for a reduction or exemption.

    Council Tax Reduction8 weeks

    If you are already paying this tax, you do not need to wait until you are fully eligible for this tax Reduction. More specifically, you are able to apply 13 weeks before you become eligible for Council Tax Reduction.

    Disability Tax Credit Case Studies

    At Disability Credit Canada, we are always looking out for our clients best interest and use our vast knowledge from many years of experience to formulate the strongest case possible!

    To give you a better picture of what working with a DTC firm, like Disability Credit Canada, can do for you when applying for the Disability Tax Credit, we have highlighted the results and conditions of some of our more recent case studies, below. All of which, we have had the pleasure of working on to ensure there success!

    Here are some examples of the DTC cases we have worked on in the past:

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    What Is The Difference Between Sections 80u And 80dd

    Section 80U
    Section 80U provides tax deductions to persons of disability Section 80DD provides deductions to the family members of a disabled person.

    The Section 80DD is also applicable to people who have deposited some amount for insurance premiums for caring for dependent disabled people. As for the deduction limits, they are the same as Section 80U. A dependent is any member of a Hindu Unified Family or an individuals siblings, parents, spouse or children.

    The amount of the deduction depends on the severity of the disability, as stated earlier. Taxpayers with a disability of less than 80% get a deduction of Rs.75,000, whereas taxpayers with severe disabilities of more than 80% get a deduction of Rs. 1,25,000 lakhs. This is a fixed amount that can be deducted from ones taxable income.

    The tax-payer with an aggregate income of INR 10 lakhs and a 60% disability can claim a deduction of INR 75,000, which reduces his income to INR 9.25 lakhs. The calculation of tax liability also changes. Heres how

    Thus, with the deduction available under Section 80U, the taxpayer can save INR 15,000 in taxes in the above situation.

    Disability Tax Credit Eligibility For Physical Impairments

    Tax Benefits to Disabled Person

    Physical impairment covers a wide range of debilitating conditions that prevent someone from naturally living their day to day life. A physical impairment diagnosis is not enough to make one eligible for DTC instead, eligibility comes from the diagnosiss effects. The diagnosis must affect psychological activities of daily life such as making decisions, making judgment, memory, concentration, etc. The CRA considers the following conditions as potentially eligible physical impairments for the Disability Tax Credit:

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    Meet Cheryl And Christie

    Cheryl and Christie have been together for thirty years.

    Two years ago, Cheryl noticed Christie began to slow down. She needed to take time to recover after every walk. Cheryl also noticed Christie could only concentrate on a given topic for a short period of time even though she could do the mental functions necessary for everyday life.

    Christie applied for the disability tax credit . As a result of the information provided by the medical practitioner on the DTC application form, she is now eligible for the tax credit because she qualifies under the category of cumulative effects of significant limitations.

    As Christie has little taxable income, Cheryl may claim any unused portion of the tax credit.

    Since Christie is eligible for the DTC, she may also be eligible for other government programs for persons with disabilities.

    Option : Completing The Disability Tax Credit Application With The Help Of An Accountant Or A Bookkeeper

    Most accountants and bookkeepers look at the DTC as a part of the Canadian Tax code. Therefore, for them your DTC application represents a simple tax document. Once you inform your accountant about your qualifying disability, they will print out the T2201 form and suggest that you have it filled out and commissioned by your medical practitioner.

    Again, the main benefit to this approach is the minimal cost involved. Provided that most accountants/bookkeepers consider this a simple service and will not charge you for their advice.

    However, there are a few drawbacks to using an accountant or bookkeeper to apply for the Disability Tax Credit, those are as follows:

  • Accountants have very little knowledge of the eligibility criteria required by the CRA. As such, they are likely to refer you to your doctor for assistance in completing your application.
  • If approved, the accountant may charge a flat fee. As they will need to apply for the credits and benefits on your behalf.
  • The two options above can work well if the applicants impairments are severe, and their medical practitioner has experience and understanding of the eligibility criteria for applying for the Disability Tax Credit.

    However, not all cases are as clean-cut and simple. In fact, most DTC applicants fall into the grey area where the applicant may demonstrate some qualifying impairments but not enough to be found eligible according to the CRA guidelines.

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    Senior Disability Tax Credits

    A senior suffering from a severe and prolonged impairment in physical or mental functions may fit the criteria for senior Disability Tax Credit eligibility. This non-refundable tax credit can help with the expenses of elder care services, disability services, home care services, assisted living, and other forms of elder care.

    Disability tax credit eligibility is determined by completing Form T2201 Disability Tax Credit Certificate, which must be certified by a qualified medical practitioner.

    For more information on Tax Credits for seniors, .

    Property Taxes On Housing

    Washington State to launch tax

    The dwelling house and one acre of land owned and used by a person who is paraplegic or hemiplegic is totally exempt from state and local property taxes. A person with Parkinsons Disease, Multiple Sclerosis, or Amyotrophic Lateral Sclerosis-ALS is also allowed this exemption if it causes the same ambulatory difficulties as a person with paraplegia or hemiplegia. The property may be owned jointly with a spouse. SC Code Ann. Section 12-37-220

    The dwelling house and the lot where it is located if owned and used by a veteran of the US armed forces, law enforcement officer or firefighter and who is 100% permanently and totally disabled due to service-connected disability, is totally exempt from state and local property taxes. The property may be owned jointly with a spouse. Under some conditions this benefit also applies to the persons surviving spouse. SC Code Ann. Section 12-37-220 2

    The dwelling house owned and used by a person who is totally and permanently disabled or a person who is blind is exempt from taxes on the first $50,000 in value of the house. This exemption also applies to anyone age 65 or over. A person who has not yet been determined disabled by any other agency may apply to the SC Department of Vocational Rehabilitation for a determination. The property may be owned jointly with a spouse. SC Code Ann. Sections 12-37-220 and 12-37-250-.

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    New Digital Application For Medical Practitioners

    The DTC digital application for medical practitioners guides medical practitioners through completing Part B of the application Form T2201, Disability Tax Credit Certificate.

    The disability tax credit is a non-refundable tax credit that helps people with impairments, or their supporting family member, reduce the amount of income tax they may have to pay.

    If you have a severe and prolonged impairment, you may apply for the credit. If you are approved, you may claim the credit at tax time.

    Claim A Qualifying Child With A Disability

    The qualifying child you claim for the EITC can be any age if they:

    • Have a permanent and total disability and
    • Have a valid Social Security number

    If the child gets disability benefits, they may still be your qualifying child for the EITC. Find out more about the additional tests for a qualifying child.

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    Table : Federal Rdtc Equal To The Maximum Federal Dtc Plus The Mean Provincial/territorial Dtc And Provinces And Territories Above The Mean Implement A Rdtc For Ages 18 To 64

    Current value of prov./terr. DTC Prov./terr. DTC over mean value Gross cost of federal RDTC at max of DTC plus mean of prov./ terr. DTC Gross cost of prov./terr. RDTC of amount above mean Net cost of federal RDTC at max of DTC plus mean of prov./terr. DTC Net cost/ for a prov./terr. RDTC above mean equal to prov./terr. max DTC
    $1,540,058,063 -$98,933,532

    A final option would be for the federal government to consider an alternative to the current tax credit formula and instead convert the Disability Tax Credit to a federal transfer payment . In the recent changes to federal child benefits, the federal government abolished the previous non-refundable Child Tax Credit, worth approximately $338 per child, and used the resultant savings to boost the Universal Child Care Benefit , and extend it to children ages 6 to 17 at the amount of $720 a year. The Universal Child Care Benefit is paid as a non-income-tested but taxed transfer payment . A similar program innovation could be considered for the Disability Tax Credit.

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    Is short-term disability taxable as income?

    Meet the people who may be eligible for the disability tax credit or other government programs for persons with disabilities.

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    How To Apply For Disability Tax Credit

    The DTC application process is made to be relatively straightforward and accessible to all persons interested in applying. There are two ways to fill out Form T2201, Disability Tax Credit Certificate, to apply for the DTC digital application, and manual completion of PDF. Both of which need to be filled out, completed, and signed by the individual applying, and their medical practitioner, before being submitted to the CRA for further assessment.

    Qualifying and getting approved for the DTC is not always a simple process. In fact, a large percentage of Canadians who apply each year have their applications denied by the CRA.

    Though, every person looking to apply is held to different circumstances. Therefore, we suggest that you consider one of the following routes for applying:

    Larger Standard Deduction For The Aged

    If you’re over 65, you also qualify for an additional deduction. If you’re single, you get an additional deduction of $1,750, and if you’re married, each spouse over 65 gets an additional deduction of $1,400.

    What if you’re blind and over 65? You can get the additional deductions for both blindness and being over 65.

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    The Tax Cuts And Jobs Act Of 2017

    • Increases the amount of contributions allowed to an ABLE account and adds special rules for the increased contribution limit.

    • Allows an ABLE accounts designated beneficiary to claim the saver’s credit for contributions to the account.

    • Allows rollovers in limited amounts from a 529 qualified tuition program account of the designated beneficiary to the ABLE account of the designated beneficiary or his or her family member.

    Is The Disability Tax Credit Federal Or Provincial

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    The DTC is a Federal tax credit program available to all Canadians and is administered by the Canada Revenue Agency .

    The amount you receive from the government as DTC consists of a Provincial amount and a Federal amount. The amount received is determined by the base Federal amount, which will be the same regardless of the province you live in, and the Provincial amount, which differs from Province to Province.

    The DTC program was created to reduce the amount of income tax Canadians with disabilities must pay. Because of this, the Provincial amount changes based on the Province you live in, just as the amount of taxes you pay is different in each Province.

    NOTE: In the How Is the Disability Tax Credit Calculated? we will touch more on how the amount you receive from Provincial and Federal sources is determined.

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    Appealing The Denial Of Your Disability Tax Credit Application

    • You can call the CRA and request further clarification on your application @1-800-959-8281, between the hours of 9:00 a.m. and 5:00 p.m., Eastern Standard Time.
    • You can write to the CRA requesting a review of your application. In such a case, you should also include any new or updated medical information from a medical practitioner who is familiar with your situation.
    • You can appeal the CRAs decision by raising a formal objection within 90 days of the CRA sending you a notice of determination.
    • Or you can submit a fresh T2201 form with new information about your impairments and/or use a different medical practitioner with greater knowledge and understanding of your impairment and the DTC eligibility criteria.


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