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Royal Canadian Mounted Police
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Are You Taking Advantage Of All Tax Breaks And Grants
Disability Tax Credit
RCMP Veterans Association – Disability Tax Credit
(the following is a summary of a recent presentation to the Victoria Division of the RCMP Veterans Association by Rick Lawson, Sgt. retired and professional tax associate Fin MacDonald courtesy of Sim Takeda Chartered Accountants ( Avenue Income Tax) located in Oak Bay, BC)
Disability and Income Tax System
If you are a person with a disability or you support someone with a disability, you may be able to claim the deductions and tax credits on your tax return.
The Disability Tax Credit is only one of several credits available to help compensate for the extra expenses that may result from a disability. The credit reduces taxes up to $1,400 per year for an eligible person. This non-refundable credit only works to reduce tax payable to zero. If there is no tax payable because of low income and/or other non-refundable tax credits such as the age amount, dividend tax credit, charitable tax credit etc. and the person is unable to use the full amount or a portion thereof the amount can be transferred to the person’s spouse or common law partner to reduce their taxable income. The credit is also retroactive up to 10 years requiring a T1 Adjustment Request for the applicable years.
How do you qualify?
A qualified medical practitioner must certify in writing (tax form T2201) the person suffers from a severe prolonged impairment that leaves the person markedly restricted in performing one of the daily activities of daily living, or significantly restricted in performing one or more activities of daily living with a cumulative effect of being markedly restricted.
What do these words mean?
Severe – means unable to perform one of the tasks of daily living, i.e. speaking, hearing, walking, elimination (bowel or bladder functions), feeding, dressing or mental functions – all or substantially all of the time.
Prolonged – means at least 12 months. If the person suffered a stroke that leaves the taxpayer bed-ridden the person is only eligible if the person lives 12 months after a stroke.
Markedly restricted – examples include
Walking – unable to walk 100 metres on level ground without stopping repeatedly
Elimination – a colostomy that requires extra time to manage
Feeding – unable to, or takes extra time due to lack of upper body dexterity
Dressing – unable to do up one’s buttons or taking extra time
Mental functions – a person who can’t remember, for example to turn off the stove or leaves water running, gets lost on a walk in the neighbourhood
The Mechanics of Qualifying
The family doctor needs to understand the impact of the disabilities on the patient/taxpayer as each person can be uniquely affected. The doctor must complete the T2201 to meet the requirements of the Canada Revenue Agency. This is where a professional tax preparer may be of assistance.
Medical practitioners may sometimes not fully appreciate the subtle differences between qualifying for CPP Disability, Long Term Disability or Government provided Disability Benefits verses the Disability Tax Credit requirements. The doctor may know the diagnosis but may not understand how to assist their patient in completing the form properly.
Preparation of the T2201 is always recommended with the assistance of qualified tax preparer. Before tax time speak with a tax professional who can demonstrate sufficient knowledge (to your satisfaction) of the Disability Tax Credit process. This will help to ensure the person receives the best advice possible regarding this important tax credit including any other income tax services or advice.
An experienced tax professional can sit down with person or their spouse, children or other care giver to review the A Day in the Life of the person applying for the credit. These are questions and a process developed by the presenter Fin MacDonald. This process includes the doctor who will be completing the T2201 Certificate and helps to ensure all the requirements are properly documented for submission to the Canada Revenue Agency.
For more information regarding this credit and other credits available telephone your local Canada Revenue Services office or visit Canada Revenue Services on-line at
or directly at
The following is worth noting. There are both federal and provincial gasoline tax rebates available for persons who qualify (disability) as well as financial assistance under the Canadian Mortgage and Housing Corporation for persons requiring residential modifications. For more details and information visit the Canada Revenue Services, Canadian Mortgage and Housing Corporation and your Provincial Government personal income tax offices/ web sites. Also enquire and make note any retroactivity provisions regarding the rebates.
December 2010