Tax Benefits for People with Disabilities and their Families

By Salina M. Dewar, Tax Program Advocate, DABC

There are many other benefits, tax credits and deductions that may be available to people with disabilities and their families who support them.  Some of these are non-refundable, so they reduce the amount of tax a person or family must pay. Others are refundable, resulting in extra money back. Specific amounts mentioned in this article were current for the 2017 tax year.

Disability Tax Credit (DTC) Line 316:  to apply for the DTC, your medical practitioner has to complete and sign a T2201 form-Disability Tax Credit Certificate and it has to be approved by the Canada Revenue Agency (CRA). If you are approved for the DTC, you can claim a credit of $8,113 for yourself, and this credit can be transferred to your spouse or another person if you live with them, or they provide food, shelter or clothing to you on a regular and consistent basis. Being eligible for the DTC can allow you to claim certain deductions, credits, and benefits as follows:

• Reduce the amount of tax you have to pay. If you do not pay taxes or cannot use all of this credit, you can transfer your unused credits to a spouse or other family members on whom you were dependent
• If you have a child who is under 18 and has been approved for the DTC, you may be eligible to receive a tax-free benefit of up to $2,771 per year ($230.91 per month)
• Enable you to qualify for the disability supplement of Working Income Tax Benefit with less working income than people who do not have a disability,
• Depending on your age, enable you to open a Registered Disability Savings Plan and access government grants and bonds that may be worth thousands of dollars, to help you save for later life.

Medical Expense Tax Credit:

(Line 330 for self, spouse/common law partner and children under 18; line 331 for other dependents)

Medical devices, medications, treatments and some services required to help a person function may be a valid medical expense.  The CRA website contains a list and search tool for many of the expenses that may be claimed as medical expenses.  If you have a medical expense that is not on the list, you should contact the CRA, because your expense may still be covered.  In some cases, a medical professional must have prescribed the item or medicine, or the person for whom this expense arose must have a valid Disability Tax Credit.

Some key medical expenses that you may be able to claim are:

• Attendant care costs for full-time care provided by an attendant who is 18 or older and not a spouse or common-law partner to you, your spouse/ common-law partner or your dependent;
• Costs of full-time care nursing homes or schools/ institutions providing care and training;
• Cost of salaries and wages for the care provided to seniors in retirement homes or seniors’ homes;
• Cost of salaries and wages for part-time attendant care, or care and supervision in your home, group homes and other facilities
• The extra expense you pay to buy gluten-free food if you have Celiac disease
• Travel costs can be claimed if you have to travel 40 km or more for medical care. If you have to travel 40 km to 80 km, you can claim the cost of public transit.  If you have to travel more than 80 km for medical care that is not available closer to you, you can claim meal and accommodation costs.

This tax credit is non-refundable.  For people who pay taxes, it reduces the amount of taxes they must pay. However, if they have no taxable income they will not benefit from this tax credit.

• Line 330 – You can claim the total of the eligible expenses minus whichever is less: $2,268 or 3% of your net income.
• Line 331 – You can claim the total of the eligible expenses minus whichever is less: $2,268 or 3% of your dependent’s net income.

Depending on the type of care the person with a disability requires, (for example full-time care or specialized care, a nursing home, a full-time attendant at home, at a school, institution, or other place), you can claim DTC and medical care both, or only one of them.

Working Income Tax Benefit (WITB) Line 453, and related disability supplement:

To be eligible for the Working Income Tax Benefit (WITB) and the disability supplement, the person with the disability must be approved for the DTC.  For 2017, in BC, they would have to have a working income of more than $2,295 but less than $24,010. In the same year BC families would be eligible to claim the WITB and disability supplement if either one or both spouses have a disability and the disabled spouses or spouses had working income of $2,295 but less than $36,414.  In a family, only one spouse may claim the WITB and the person who is eligible for the disability supplement should claim it. If both spouses qualify for the WITB disability supplement, they can both claim the disability supplement.

Home buyer’s Amount (Line 369):  If you buy a home that is more accessible or otherwise better meets the need of yourself or person with the disability who lives with you, you may be able to claim the home buyer’s amount, even if this is not your first home. To claim this amount, the person with the disability must be eligible for the DTC in the year you buy the home. The amount that you can claim on line 369 for buying a qualifying home is $5,000.

Home Accessibility Amount (Line 398):  You can claim up to $10,000 for expenses to make the home more accessible or safer for a person who lives in the home and is either 65 or older or eligible for the DTC.

Refundable Medical Expense Supplement (Line 452):  To be eligible, the tax-filer must be 18 years or older, a Canadian resident for the year they’re filing, and meet CRA income requirements.  They must also be eligible to claim the disability supports amount or claim medical expenses for other dependents on their tax return at schedule 1 line 332.

The Canada Caregiver Amount (Line 303, 304, 305, 367)

This tax credit replaces the caregiver credit, the family caregiver credit and the credit for infirm dependents aged 18 + years.

Do you support a spouse or common-law partner, or a dependent with a physical or mental impairment?  If so, the Canada caregiver credit (CCC) is a non-refundable tax credit that may be available to you.

• For your spouse or common-law partner, you may be entitled to claim an amount of $2,150 in the calculation of line 303. You could also claim an amount up to a maximum of $6,883 on line 304.
• For an eligible dependent 18 years of age or older, you may be entitled to claim an amount of $2,150 in the calculation of line 305. You could also claim an amount up to a maximum of $6,883 on line 304.
• For an eligible dependent under 18 years of age at the end of the year, you may be entitled to claim an amount of $2,150 in the calculation of line 305 or on line 367for your child.

The Disability Supports Deduction (Line 215) is an amount that a person with a disability may claim, that serves to reduce the amount of their income for the purposes of their tax return.  Only the person with the mental or physical impairment may claim this deduction.  In some situations, the person with the disability must also have a valid DTC.

In addition, the tax-filer may only claim this deduction if they have incurred medical costs to be able to work, carry on a business, attend a designated secondary school or educational institution, or to complete post-secondary research.

Only the cost of certain devices or services, which a medical practitioner has prescribed or has certified as necessary, may be claimed.  If an expense is included in the claim by anyone for the medical expense tax credit, it cannot be included in the calculation of the medical supports deduction, but the person with a disability may split a medical expense between the medical expense tax credit and the disability supports deduction.

Additional Tax Credits:

There are several lesser-known credits or benefits that may be claimed by or for a person with a disability.  Some of these are:

• If you are buying or building an accessible home, you qualify for the Home Buyer’s Plan, which allows you to withdraw up to $25,000 from an RDSP.
• Education-related benefits that are usually available for full time students may also be available for part-time students with disabilities,
• Tax exemption or employment benefits or allowances received because of a disability,
• Refund of excise tax on gas if you cannot use transit, and
• Tax credit for childcare expenses for a child with a physical or mental impairment, even if they were 16 + years old, so you or your spouse/ common law partner can work, run a business, go to school or complete research.

In addition, some products and services for people with disabilities are exempt from GST/HST and you can request a rebate either from the supplier or the CRA.

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This article is not intended to provide financial or legal advice and is not meant to replace the expertise of a lawyer or financial advisor.