Disability Tax Credit Benefits for Families and Caregivers
Caring for a loved one with a disability, whether mental or emotional, can be quite challenging. It can cause emotional, psychological and physical stress to the caregiver. Fortunately, the Canadian government has made it quite easy, as they are now offering the Disability Tax Credit to families and caregivers of people with disabilities. Valuable financial support is available to alleviate the financial burden on families.
If you are someone who is not aware of how DTC works and how it can benefit the family of disabled individuals, then don’t worry. In this article, we have mentioned everything that you need to know. Let’s dive right into the article and take a look.
What is Disability Tax Credit?
Many people are unaware of the DTC. This is a non-refundable tax credit offered by the Canadian government to families and caregivers of people with disabilities. This is the best way to reduce the financial stress on families that are helping disabled members in their families. The government have recognized how hard it is to take care of disabled people and, with the help of this tax credit, the additional costs that come with severe impairment.
The credit itself is not a direct payment method, but it reduces the total taxable amount each year. It is also important to know that people with disabilities do not have enough money for the taxable recredit, which can be transferred to their family members or even caregivers. This eligibility is certified by a healthcare professional through the T2201 form, also known as the Disability Tax Credit Form.
Who Qualifies for Disability Tax Credit
Another question that people often have is how they would know if they are qualified for the Disability Tax Credit. To qualify, they must have a severe severing-term, severe and enduring impairment. The impairment should be at least 12 consecutive months. The impairment should also significantly impact the person’s ability to perform their daily activities. This means the individual should find it difficult to feed, dress, walk, and perform other daily tasks.
Eligibility is certified by a healthcare professional who assesses the condition, its impact, and its effect on the life of the individual with a disability. Numerous different situations and fallers come under the umbrella of this tax credit. Children who have developmental delays such as autism, ADHD or others can also qualify for the Disability Tax credit. Other than this, people with mobility issues, diabetes, and mental health issues can also qualify for this non-refundable program.
How Families and Caregivers Can Benefit from DTC?
DTC is the most effective way through which families can lower the financial burden that comes with living with a disabled person. Below, we have mentioned some of the ways families and caregivers can benefit from this program.
Financial Relief
The primary benefit that families and caregivers can obtain is significant financial relief through this tax credit. If the person with a disability has little or no taxable income, then this amount can be claimed by a family member, such as a caregiver, parent, or even spouse. This can be very beneficial, as it will enable families to manage the additional costs associated with the condition, such as therapies, transportation, medication, and other related expenses.
Retroactive Payments
When you are approved for the DTC, you can apply retroactively for up to 10 years. This means that the families and caregivers can receive the dollars in backdated tax credits. It also means that they will have a financial cushion to cover all their ongoing and past care expenses.
Eligibility for Other Programs
Once you have applied for DTC, it also opens the door to other opportunities. This means that you can also apply to other government programs, such as the Registered Disability Savings Plan, which is only available to individuals who receive approval receive approval from the DTC. In addition to this, there are various programs that offer grants to people with disabilities to help them improve their financial stability.
Support for Caregivers
This is also a means through which the emotional and mental strain can be relieved from the caregiver of the disabled individual. The DTC recognizes the effort, and this is a way to acknowledge the caregiver’s support.
Additional Credits Linked to DTC
There are a couple of different credit links to DTC that people can avail of. Let’s take a look at them.
Canada Caregiver Credit
The Canada Caregiver Credit is also a non-refundable tax credit for low-income individuals and caregivers who provide support. The total impact of mental or physical impairments is based on the relationship and also the dependent’s net income.
Attendant Care Deduction
If you require an attendant to earn a business income, then you can claim attendance expenses and help people with disabilities.
Child Care Deduction
Single parents and even two-earner families parents can apply for this program if they have a child who qualifies for the DTC. The maximum deduction here is $10,000 per child, which can be beneficial and significantly reduce the financial burden on families.
