The Disability Tax Credit may be one of the best ways to get income tax money back from the government – and it is also one of the least aptly named of the tax credits available in Canada. While most people dismiss the credit because they do not consider themselves disabled, it is actually designed for people with a wide range of physical impairments, and the eligibility requirements are remarkably broad.
The key to determining your eligibility for the credit is to ask yourself whether you feel restricted in the activities you perform every day.
If you live with an injury that makes it difficult for you to do simple things like dress yourself in the morning, carry on conversations, read and write, or walk to your car, the odds are you will qualify for the tax credit. This means you will be able to deduct all the relevant expenses from your taxable income and receive a large refund each year.
The only documentation that the Canada Revenue Agency requires is a short application, which can be sent at any time of the year. This ensures that the individual is markedly or significantly restricted, and has been for a period of over twelve months. This is backed up by the approval of the applicant's certified medical practitioner.
Unfortunately, the Disability Tax Credit is relatively unknown, so much so that many doctors are unaware of what actually makes a patient eligible, and mistakenly refuse to authorize the patient's claims. For this reason, it is a good idea to use the services of a professional accountant or bookkeeper, who can facilitate the application process. The odds are that an accountant will determine your eligibility with greater accuracy than a medical practitioner, whose profession does not require it.
The CRA also allows a wide variety of expenses to be claimed once the application is accepted. For instance, if you have a sports injury that has impaired your movement for over a year, you can deduct the cost of physical therapy, orthopedic shoes, and similar related costs. Mental disorders also fall under the umbrella of the Disability Tax Credit, as long as they impede the day-to-day mental functions that the typical person requires. Anyone who is severely mentally disabled will unduly qualify for the credit and deduct costs such as tuition for special schools or regular therapy, but the less severe and much more common mental disorders like anxiety or depression still affect individuals on a daily basis and cause them to incur more costs than they would have otherwise. Upon acceptance, these costs can be deducted as well.
If you have a prolonged physical or mental handicap, regardless of how mild it may be, you are closer than you think to saving a large amount of money on your taxes.