My Writing > Tax Credits Benefit Families of Persons with Disabilities


26 Dec 2004

Tax Credits Benefit Families of Persons with Disabilities

As you approach tax returns for the 2004 taxation year, families supporting persons with disabilities will want to consider tax credits available to reduce the tax they pay.  Federal non-refundable tax credits are found between lines 300 and 350 on Schedule 1 of the personal tax return.  It is possible under the fairness provision to go back for 10 years to 1994 if tax credits were not claimed and a taxpayer is entitled to a claim. If you work and support someone with an infirmity or disability, you could have less tax taken off at source.  Complete a TD1or T1213 for your payroll administrator. 

Some of the tax credits that are important to families with persons with disabilities include:

  • Amount for eligible dependent, parent or grandparent, child, grandchild, brother, or sister, by blood, marriage, common-law partnership, or adoption (legal or in fact) and either under 18, or mentally or physically infirm.
  • Amount for infirm dependent age 18 or older (don’t have to live with you but you support them)
  • Caregiver amount (don’t forget parents or grandparents might qualify)
  • Disability amount  See the New Guide RC4064, Information Concerning People with Disabilities - Includes Form T2201 – 2004 http://www.cra-arc.gc.ca/E/pub/tg/rc4064/README.html
  • Disability amount supplement for under 18 at the end of the year
  • Medical Expenses are listed in the Income Tax Act in S. 118.2(2) and there are over 60 categories, all with caveats about who and when they apply:
    • Medical/dental, full time attendant, nursing home, group home, retirement home, school, institution or other place (6 rules for care in S. 118.2(2)(b)-(e)
    • Transportation, travel costs, (include flat meal and vehicle rates)
    • Guide dogs, transplant costs, lip reading, signing, note taking, voice recognition
    • Moving, driveway access, vans for wheelchairs
    • Caregiver training, therapy, tutoring (if you meet the requirements)
    • Prescribed devices under Regulation 5700
    • Drugs, lab tests, dentures
    • Health plans - Premiums for Extended Health and Dental premiums on payroll plans (If you pay the premiums and your employer doesn’t pay them for you)
    • Gluten free food- incremental cost (good luck documenting this one)
  • Medical Expenses Notch provision – significant changes in 2004 budget limit or enhance claims depending on circumstances You can find information about tax credits in the General Income Tax and Benefit Package at  http://www.cra-arc.gc.ca/formspubs/t1gnrl/llyrs-eng.html

Some expenses that families will want to know about:

  • Child Care Expenses can transfer to the higher income spouse if the lower income spouse is infirm (this could include child care paid due to spousal post partum depression)
  • Disabilities Supports Expenses are an expansion of Attendant Care Expenses and are for those who work or attend school  See T929 Disability Supports Deduction for 2004 and later years at http://www.cra-arc.gc.ca/E/pbg/tf/t929/README.html

Other tax programs related to personal tax credits include:

  • Refundable Medical Expense Supplement
  • Home Buyer’s Plan (special rules for funding for mobility impairment) See the CRA Guide
  • RRSP/RRIF rollovers
  • Child Disability Benefit (additional $1,600 per year) automatic qualification if Form 2201 approved

Other government programs to be aware of:

  • Gas Tax Refunds, Federal Excise and Provincial Gas
  • Medical Services Plan premium assistance for lower incomes
  • Property tax grants and deferment http://www.rev.gov.bc.ca/rpt/ 
  • CPP (credit splitting on separation, child rearing drop out provision, disability, sharing pensions)

If you hire a caregiver you are most likely responsible for them as an employer unless they meet criteria as a self-employed.  You are required to issue pay cheques, remit tax, CPP and EI and issue T4’s by the end of February.  You are responsible for WCB premiums and should consider notifying your home insurance provider if you have a caregiver working in your home.  If you receive social assistance, the funding for a respite caregiver does not make the payment to the caregiver tax free.

 

Appropriate documentation is critical to the success of tax credit claims.  Refer to CRA publications, call 1-800-959-8281 and check the website www.cra.gc.ca for updated information and forms.

Courtesy of Eileen Reppenhagen,  eileen.reppenhagen@gmail.com    Copyright December 26, 2004

Eileen Reppenhagen



 

 

 

 
 
 
 
 
 
 
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