The Disability Amount, a Most Lucrative Tax Credit

The Disability Tax Amount, a non-refundable tax credit valued at $8,001 in tax year 2016, can be claimed by someone who is markedly restricted in the activities of daily living on a permanent basis, or by their supporting individual.

Especially vulnerable for missing this valuable claim are those with progressive diseases, like Alzheimer’s or cancer, who may begin to qualify for it sometime after diagnosis. In addition, it’s important to note that survivors can still make the claim for deceased loved ones. There is also a supplemental credit for disabled minor children in the amount of $4667, for a total credit of $12,668. The supplement must be reduced by the amount of any child care paid over $2734.

Prior to the 2017 Federal Budget, you needed to have a doctor or other qualified healthcare professional fill in form T2201, Disability Tax Credit Certificate. Now, Nurse Practitioners may complete the form. Claim this lucrative credit first on the return of the disabled adult; if not needed to reduce tax for the affected person, it can then be transferred to a supporting individual, including the spouse.

Previous tax returns can be adjusted for the tax credit for each year that the Disability Tax Credit Certificate has been approved by CRA.  This can result in five-figure deposits over multiple years if this tax provision was forgotten.  Review the taxation years 2007 forward to see if you or a family member may have qualified.

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