Applying for the Revenue Canada disability tax credit certificate was something I did to help our friends’ parents who paid more than they needed to.
When someone doesn’t know how to do something they normally do research or call in the professionals to help them.
Often you hear stories about how people were taken advantage of or how they paid far too much for a service they could have easily done themselves.
My friends’ mother had not realized that she could claim disability tax credits until it was mentioned to her by her daughter. She wanted to claim for the 10 years previous so she could claim at least some of the money she had over-paid the government while working and looking after her very ill husband.
Her mother had already tried accessing disability tax credits through a company that advertised online and charged her $1300 for the service to no avail.
It reminded me of the time when my wife and I were filling out the immigration forms to become a permanent resident in Canada. You could hire a representative to complete the forms which you would need to obviously assist with.
All they really do is fill out the forms and read the instructions so if you can use a pen, use a computer and print you can do it yourself. It’s the same thing with the disability tax credits application process. I think that people get too overwhelmed when it comes to government forms but they are pretty straightforward.
In the case of applying for the disability tax credits through my research Revenue Canada is telling you what they want in terms of information and you give it to them.
The hired company charged her to fill out representative forms and fill out the T2201 form for a few of the years and billed her $1300. This bill is ridiculous in terms of costs of the work completed but it did completed the process even at an exorbitant amount.
Not everyone in this world is here to help people as there are unscrupulous companies and individuals that are lurking in the background ready to pounce and whisk your hard earned money away.
Then again they are there to make money so if you don’t do research then be prepared to pay the big bucks for something you can do for the cost of a stamp.
Her next port of call was a much more established tax centre in her city that talked her through the process and filled all the forms out for her. This service cost $329 but this time the disability tax credits were applied to her taxes for the remainder of the years.
The costs were for the same service of being a representative and filling out forms that you could easily do yourself. Cheaper, yes but again more than you needed to pay.
How I helped them apply for disability tax credits
All this happened 2 years ago but I was asked to go through this process because it was time for her mother to re-apply for her husband’s last 2 years worth of disability tax credits to be applied.
I’m not a tax professional and I’m not writing this post to say this is the way it’s done as a rule. This is the way we performed the process with a little guidance and research and I’m letting you know how we went about it.
I helped them because I was curious about this disability tax credit and so I started to do some research for them. It turns out I taught them how to save money in their budget instead of spending more than they will ever have to again when they apply.
The main applicant would be the husband in which tax credits would be applied to any income he has. If there is no income left to apply the tax credits against then any remaining tax credits would go to the wife.
As I understand she can receive the tax credits because she is a caregiver to her husband who can’t work. I did not see the original T2201 form so I cannot confirm or deny that this the reason for her tax credits. Only the doctor and the government would know.
So, the process of claiming disability tax credits goes like this:
- You need to print off or fill in form T2201 from the Canadian Revenue Agency. Fill in your details and any other information that it requires from you.
- Take the form to your doctor who will then fill in the appropriate parts that they need to.
- Send the form to your tax office that deals with disability tax credits. In our case, her mother had to post hers to Winnipeg. You are currently applying for the disability tax credit certificate which you will then use to apply the credits to your taxes.
- Wait, they will send you notification that the disability tax credit certificate is successful or not.
- If successful, you can then apply to get the disability tax credits applied to your current taxes or back taxes. As far as I know, you can go back up to 10 years and apply the disability tax credits to taxes filed then.
- To apply the disability tax credits, you now need to write a letter or fill in T1 Adjustment forms for each tax year. I went down the letter writing route as suggested by the lovely lady I spoke to from revenue Canada. I was told to be repetitive and redundant in writing the letter to eliminate any chance of mis-understanding between what we had been told and what the person receiving the letter read. Anything you don’t understand they will tell you if you make the simple phone call.
Here is a sample letter for applying for your disability tax credits similar to what I wrote:
Address line 1
Address line 2
Address line 1
Address line 2
I (Name) (Social Insurance Number) would like to apply my approved disability tax credits towards my (Year) taxes. If I cannot make maximum use of the disability tax credits on my taxes, can you please apply them to my (husband or wife) (Name) (Social Insurance Number) taxes of the same year(s).
Name (First and Last)
If the disability tax credits are to be applied against a number of years because you are claiming for previous years you could abbreviate the years to 2005 – 2013.
Personally I wrote the letter according to the rules given to me over the phone from the Canada Revenue Agency (CRA). I listed each year separately which sounds a little monotonous but it certainly seemed to work in our favour. There was no possibility of reading the instructions incorrectly.
My understanding of the process and forms led to her receiving her disability tax credits with no issues which isn’t bad for just doing a bit of research. Take your time and phone the CRA as they were a great help.
When you receive the disability tax credits cheque in the post there will be some paperwork that accompanies it. Don’t throw this paperwork away thinking you are all finished.
There will be a line on the paperwork stating how much interest you earned over the period if you applied for previous tax years to be re-calculated.
This interest is considered as taxable income and will need to be entered in on your taxes for the year it states in the sentence.
She was so happy and we will apply again for next years disability tax credits in the same manner. This time however I will simply review what they do since she knows how to apply for the disability tax credits on their own.
The costs to apply for disability tax credits
The grand total bill was a Canadian permanent stamp, an envelope and a sheet of paper. If you are applying for disability tax credits for the first time you will probably get charged $20 – $40 from your doctor to fill out the T2201 form needed for the disability tax credit certificate application.
I would be wary of those companies advertising online promising that they can get you up to $40,000 in disability tax credits as they will charge you an extortionate rate to go through a process you can easily complete yourself.
If you feel that your situation is too complex call the CRA and talk to them and let them know your situation. They will walk you through the process like they did when I made the phone call to learn about applying for the disability tax credit.
Have you ever applied for the disability tax credits? Share your story in the comments below.
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