Tax Credits For Persons With Disabilities In Canada
Living with a disability in Canada or if you care for someone with a disability means you may be eligible for certain tax credits or programs.
The most important is to be approved for the disability tax credit (DTC), which opens up the door to other benefits.
Our son was diagnosed with ADHD, ASD, and SPD, all of which qualify our son for the autism disability tax credit.
I also have a wife with a disability who qualifies for the DTC, which is another reason why learning about tax credits was imperative.
When it comes to tax credits, many people, whether they have disabilities or not, are unaware of what they can claim on their income tax returns.
Without knowing, anyone can miss valuable tax credits and programs that may reduce their taxable income.
Today, I will discuss tax credits, benefits, and programs available to Canadians approved for the DTC.
Non-Refundable Tax Credit vs. Benefit Payment
I think it’s important to discuss the difference between a non-refundable tax credit and a benefit payment.
It was brought to my attention that some people who may qualify for a credit or payment are misunderstood.
Disability Tax Credit
What is the disability tax credit?
The disability tax credit (DTC) is a non-refundable tax credit that helps people with physical or mental impairments or their supporting family members; reduce the income tax they may have to pay.
Eligibility For Disability Tax Credit s
If a medical professional deems you have a severe mental or physical impairment, you may be eligible for the DTC.
Being eligible for the DTC can open the door and act as a gatekeeper to other federal, provincial, and territorial programs such as the registered disability savings plan, the Canada worker’s benefit, and the child disability benefit.
To be eligible for other programs, you must apply for the disability tax credit whether you believe you qualify.
I applied for Mrs. CBB, thinking that we wouldn’t qualify, but she did, and each year I get an income tax reduction using the tax credits.
Since Mrs. CBB has no taxable income, I can transfer the tax credits to my return.
Disability Amounts For The 2022 Tax Year
18 and older: Option 1 of 2
- $8,870 (disability amount)
- equals$8,870
17 and younger: Option 2 of 2
- $ 8,870 (disability amount)
- plus$ 5,174 (supplement for children)
- equals$14,044
Disability Tax Credit Eligibility
From the Canada.ca website, below are the criteria used to decide whether someone would qualify for the disability tax credit.
It’s not about the medical condition that qualifies someone for the DTC; it’s the effects of the condition.
Eligibility for the DTC falls under these categories:
The following categories have their unique criteria:
If you qualify for the DTC, you can file for tax credits retroactively for up to ten years.
Disability Supports Deductions
Individuals who have an impairment in physical or mental functions and have paid for certain medical expenses can, under certain conditions, claim the disability supports deduction.
If you have a physical or mental impairment, you may be able to claim certain expenses incurred during the year.
- work
- go to school
- do research for which you received a grant
| Expense | Prescription needed? | Is written certification from a medical practitioner needed? |
|---|---|---|
| Attendant care expenses | See details | See details |
| Bliss symbol boards | Yes | No |
| Braille note-taker devices | Yes | No |
| Braille printers, synthetic speech systems, large print-on-screen devices | Yes | No |
| Deaf-blind intervening services | No | No |
| Devices or software | Yes | No |
| Electronic speech synthesizers | Yes | No |
| Job coaching servicesFootnote1 | No | Yes |
| Note-taking services | No | Yes |
| Optical scanners | Yes | No |
Registered Disability Savings Plan (RDSP)
A registered Disability Savings Plan (RDSP) is a savings plan for those qualified for the disability tax credit.
Contributions to an RDSP can be made until the beneficiary turns 59 years old and are not tax deductible.
When the RDSP is paid out, it is not considered income which is why no taxes are involved.
However, the Canada disability savings grant and Canada disability savings bond within the plan are considered investment income; therefore, it is taxable.
Mrs. CBB has an RDSP which she contributes to through our Manulife financial advisor.
She puts in a certain amount monthly, and the government does the same, and it’s invested.
For more information on Savings and Pension Plan Administration.
There is no annual limit on amounts that can be contributed to an RDSP of a particular beneficiary in a given year.
However, the overall lifetime limit for a particular beneficiary is $200,000 (all previous contributions and rollovers that have been made to an RDSP of a particular beneficiary will reduce this amount). Contributions are permitted until the end of the year in which the beneficiary turns 59.
For more info on transfers, limits and rollovers
Government Bonds and Grants
When you qualify for an RDSP, you can apply for the Canada disability savings bond and grant.
Grants and bonds are based on family income based on your tax return two years prior.
For example, if you qualify for 2023, they will use your 2021 income tax return for determination.
Canada Disability Savings Bond (CDSB)
The Canada Disability Savings Bond contributes money towards the RDSP for low to moderate-income individuals.
For the CDSB, the individual is not required to contribute to the plan to receive the bond.
The bond will be automatic yearly, so you won’t need to worry about anything.
The maximum yearly bond amount is $1,000 until you reach the limit of $20,000.
Using the estimation calculator, you can estimate your annual grants and bond payments.
Depending on your income
Family Income 18 years of age and younger
Until December 31 of the year, the beneficiary turns 18; their grant and bond amounts are calculated using the combined income of their parents or guardians.
Aged 19 and over Family Income
Starting the year the beneficiary turns 19, and every year after that, their grant and bond amounts are calculated using their income plus their spouse’s income (if applicable).
Canada Disability Savings Grant (CDSG)
The Canada Disability Savings Grant is a matching grant paid up until December 31 of the year you turn 49.
If you contribute to your plan, the government will also contribute.
The maximum yearly grant amount is $3,500, with a limit of $70,000 over your lifetime.
Child Disability Benefit
Child Disability Benefit
The child disability benefit, or CDB for short, is a tax-free payment of up to $2,985 annually or $248.75 monthly.
Child disbaility benefit is made for families who care for a child under 18 who is eligible for the disability tax credit and Canada Child Benefit (CCB).
If your child is already receiving the CCB and the DTC, there’s nothing more. You will get the CDB automatically.
Payments are calculated for the CBB every July based on the AFNI using the following three criteria.
Once the family net income goes beyond $71,060, a benefit reduction begins for one child at 3.2% and two or more children at 5.2% of the AFNI.
Child disability benefit (CDB) guideline table effective July 2022 – June 2023 (2021 base year)
Child disability benefit (CDB) amounts per month for one to three eligible dependants.
| Adjusted family net income ($) | One eligible dependant ($/month) | Two eligible dependants ($/month) | Three eligible dependants ($/month) |
|---|---|---|---|
| Under $71,060 | $248.75 | $497.50 | $746.25 |
| $75,000 | $238.24 | $478.79 | $727.54 |
| $80,000 | $224.91 | $455.04 | $703.79 |
| $85,000 | $211.58 | $431.29 | $680.04 |
| $95,000 | $184.91 | $383.79 | $632.54 |
| $105,000 | $158.24 | $336.29 | $585.04 |
You can read more here and for updates on the Canada Disability Benefit.
Home Accessibility Tax Credit
What is the home accessibility tax credit (HATC)?
I wanted to learn more about this tax credit since I am renovating our family home.
With two family members with disabilities, I wanted to know if we might qualify for this tax credit.
The HATC is a non-refundable tax credit for eligible home renovations or alterations to accommodate someone with disabilities.
How much is the eligible expense limit for the home accessibility tax credit?
For the 2022 and subsequent taxation years, the Budget proposes to increase the annual expense limit of the HATC to $20,000, which would provide a tax credit of up to $3,000.
Home Accessibility Tax Credit
Learn more information about the HATC.
Read here to learn more about what renovations qualify for the HATC and those ineligible.
Canada Workers Benefit Disability Supplement
The Canada workers’ benefit, or the CWB for short, is a refundable tax credit of up to $2,403 for workers and their families.
Individuals eligible for the disability tax credit and the CWB may also receive a CWB disability supplement of up to $720.
Maximum Basic Amount
Disability Supplement Maximum Amount
Read more about the Canada Workers Benefit.
Home Buyers’ Plan People With Disabilities
If you have a disability and want to buy or build a home, the home buyers plan is a program that will help you release funds from your Registered Retirement Savings Plan.
You also don’t have to be a first-time home buyer to access the home buyers plan as long as you qualify for the disability tax credit.
The Home Buyers’ Plan (HBP) is a program that allows you to withdraw funds from your Registered Retirement Savings Plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability. The HBP allows you to pay back the withdrawn funds within a 15-year period.
Home Buyers Plan
Canada Caregiver Credit
The Canada caregiver credit, or CCC for short, is a non-refundable tax credit for those who support a spouse, common-law partner, or a dependant with a physical or mental impairment.
When claiming the CCC, the CRA may ask for a signed statement for the individual from a medical practitioner showing when the impairment began and what the duration of the impairment is expected to be.
The CCC may also be claimed for an individual or their spouse’s or common-law partner’s child, grandchild, parent, grandparent, brother, sister, uncle, aunt, niece, or nephew.
This tax credit is used for someone who is a caregiver and supports someone with a disability with food, shelter, or clothing.
Amounts You Can Claim For The Canada Caregiver Credit
Read more here about the Canada caregiver credit.
Medical Expenses
If you have an eligible expense that qualifies as a medical expense, you can claim the expense as a medical expense and a home accessibility expense.
For more information about medical expenses, see lines 33099 and 33199.
Refundable Medical Expense Supplement
The Refundable Medical Expense Supplement (RMES) is for people with high medical expenses and low income.
You can claim all expenses, even those not purchased in Canada, but only the portion not reimbursed by benefits.
Medical expenses incurred over a 12-month period are eligible, provided they were not claimed by anyone else or during the previous year.
Amounts You Can Claim
You can claim the total of the eligible expenses minus the lesser of the following amounts:
- Line 33099 – You can claim the total of the eligible expenses minus the lesser of the following amounts:$2,479 3% of your net income
- Line 33199 – You can claim the total of the eligible expenses minus the lesser of the following amounts: $2,479 3% of your dependant’s net income (line 23600 of their tax return)
Learn more about Refundable Medical Expenses 2022.
Related: Medical Expenses You Can Claim On Your Income Taxes
If you’re not sure you qualify for any tax credits beyond the disability tax credit, keep all receipts and email correspondence for reference.
Even if you qualify, hanging on to receipts is essential to claim claimable tax credits.
For example, if you have to pay a medical practitioner to fill out any forms for your disability tax credit, you may be able to claim the amount on your tax return.
How To Submit Your Income Tax Return
If you’re like us, we like to Netfile with the CRA because it’s free but comes with limited help.
For those who want top-notch help with your return, try Turbo Tax Canada, as it’s one of the most trusted tax software.
Turbo Tax Canada is a trusted source for Canadian Budget Binder in supporting tax software in my community.
Aleternatively, you can hire a tax accountant, or for low-income or no-income earners; you will find income tax return clinics in your area for little to no charge.
For the 2022 tax season, the due dates are April 30th, 2023, to file your 2022 Income tax return, and payment owing is also the same day.
If you or your spouse or common-law partner carried on a business in 2022 with business expenditures:
Filing Due Date Income Tax 2022
- relating mostly to a tax shelter investment, your 2022 return must be filed by April 30, 2023
- other than those relating mostly to a tax shelter investment, your 2022 return must be filed by June 15, 2023
Set Up Direct Deposit
If you haven’t set up direct deposit, you must do so that any qualifying payments are deposited immediately.
For more information, go to canada.ca/disability-tax-credit
or call 1-800-959-8281.
Recap Of Tax Credits For Canadians With Disabilities
If you feel overwhelmed with the information about tax credits for Canadians with disabilities, you’re not alone.
We’ve had to wiggle our way through all of the information so we knew what we could and could not claim.
Once I find out if we can claim windows and a fitted kitchen to assist Mrs. CBB with her disabilities, I’ll let you know.
Discussion: Have you been able to claim any home renovations to accommodate a disability? I’d love to read your feedback in the comments.
Thanks for stopping by to read today’s post.
Mr. CBB
