My Writing > Tax Credits Benefit Families

revised from 2006
2 Nov 2008

 

Tax Credits Benefit Families of Persons with Disabilities or Infirmities,

Handicaps, Impairments … and Medical Expenses

 


As you approach the tax filing season, families who support persons with disabilities, as well as those persons should be aware of the revised RC4064 Medical and Disability-Related Information Guide released in mid January of 2007, early 2008 and again in early 2009. 

 

Tax credits for families are explained in this new guide in a fresh new way as a result of consultation with the Disability Advisory Committee set up in 2005 that still meets monthly by teleconference, informally of course. 

 

In addition to this guide, there are several other places to look for information about tax credits.  One is the TD1 which lists most of the credits, and along with the T1213 is a way to reduce the tax withheld at source so you can afford to pay your bills during the year if you qualify for any of the credits listed on that form.  The T1213 must be pre-approved by CRA.  Another source of information is the General Tax Guide and a third is something you would never know about, it is an Interpretation Bulletin, IT 513 Personal Tax Credits which discusses support and what that means in the Appendix.  

 

All of these are posted and searchable by their form number on the Canada Revenue Agency website at www.cra-arc.gc.ca. To make it easier, I have provided a long list of links below that should address some of your specific concerns about common topics. 

 

Oh yes, if your T4 has a new Box, Box 85 that is a medical expense you can claim on either spouses’ tax return.  It is the premiums on your extended health and dental paid by you from your net pay.  This year that box is optional.  If you know that you paid premiums through your payroll department and this box is not completed, go back and ask them to fill it in for you or the alternative is to ask them to write a letter so you can claim these premiums as a medical expense.

 

The other news of note is that the Canada Revenue Agency website administration has made a major effort to list medical expenses for all of the various medical expenses listed in the Income Tax Act in S. 118.2(2) and those under Regulation 5700 in both the RC4064 and on their website under “M”.  Medical expenses for glasses, dental, chiropractor, those are for everyone.  Only some of the medical expenses require that you have been labeled as disabled or infirm.  Most require a prescription or certification by a qualified practitioner.  The challenge may be that in your province or territory there is no licensing for certain practitioners.  There should be a list forthcoming in the next year of who is licensed and which province or territory they are licensed in.

 

Even more convenient, link through Individuals and down into Life Events and from there to What to do when someone becomes disabled? 

This is the direct link to the Persons with disabilities page

http://www.cra-arc.gc.ca/tx/ndvdls/sgmnts/dsblts/menu-eng.html

 

You will find a few hours reading material. 

 

The challenge is to document claims for complex items like medical travel or therapy where you require four different things, the disability tax credit, a prescription, someone who is qualified to administer the therapy and the receipt for the purchase of the therapy.

 

Employment standards are a provincial matter you should become familiar with if you hire caregivers in your home. How you treat your employees that are caregivers or nannies with regard to statutory holidays, vacation pay, working conditions and hours of work as well as termination pay could become very important in your decision about caring for someone in your home.

 

The employment links below will generate discussion as this is a very uncomfortable topic in a country challenged by a huge underground economy, especially in the caregiver arena.  The liability to families if there is an accident or injury is enormous.  WCB takes no prisoners and your house insurance company may require you inform them of workers on your premises.   

 

Spend some time reviewing these links:

 

RC4064 Medical and Disability Related Information

 http://www.cra-arc.gc.ca/E/pub/tg/rc4064/README.html

 

 

T2201 Application form for the DTC

  http://www.cra-arc.gc.ca/E/pbg/tf/t2201/README.html

  

TD1 Overview - See also TD1 and TD1 Worksheet, both federal and province/territory

 http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/hwpyrllwrks/stps/hrng/td1/menu-eng.html

 

T1213  Request to reduce tax deductions at source...

 http://www.cra-arc.gc.ca/E/pbg/tf/t1213/README.html

 

T929 Disability Supports Deduction for 2005 and later years

 http://www.cra-arc.gc.ca/E/pbg/tf/t929/README.html

 

Attendant Care  See RC4064

 

Travel expenses for medical expense claims 

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/330/llwbltrvl-eng.html

 

Travel rates

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/330/llwbltrvl-eng.html

 

IT 513 Personal Tax Credits

http://www.cra-arc.gc.ca/E/pub/tp/it513r/it513r-e.html

 

 

Employee or self-employed  

http://www.cra-arc.gc.ca/E/pub/tg/rc4110/README.html

 

T4115 Social assistance income report is added to this list as a heads up for organizations with boards that fund families to hire caregivers. A T5007 is required to be prepared for funding provided by non profits or government for respite or attendant care for employees paid as a medical expense under S. 118.2(2)(b.1) if the patient is not certified as disabled and no SIN # / T4 issued to caregiver:

http://www.cra-arc.gc.ca/E/pub/tg/t4115/README.html

 

The potential liability for boards who do not comply with the requirement to issue T5007’s is potentially crippling to the organization they support.  Knowledge about not for profit compliance with a variety of federal and provincial/territorial laws is essential when participating in the management or on the board of a not for profit organization. 

 

See article for a more information:

http://www.taxdetective.ca/articles/article/1482041/72556.htm

 

See webpage with information about not for profit compliance

http://www.taxdetective.ca/Nonprofitlinks.html


Eileen Reppenhagen, Certified QuickBooks ProAdvisor writes and speaks about accounting and tax.  She is a regular contributor to Canadian MoneySaver, The TaxLetter and Intuit’s award winning online publications for accountants and QuickBooks ProAdvisors, ProConnection Newsletter and Advisor Advantage.  

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