If you qualify for the disability tax credit, you could get up to 10 years of backdated tax breaks — plus more financial help from the government.
The disability tax credit (DTC) is a non-refundable tax credit used to reduce the income tax you pay. It’s available for people with a severe and prolonged physical or mental impairment, subject to approval by the Canada Revenue Agency (CRA). It’s meant to help even out the tax burden by allowing some relief for disability costs, since these are unavoidable additional expenses that other taxpayers don’t have to face.
In 2014, the federal non-refundable DTC for an adult was $7,766. If the person with the disability was a child under 18, there was an additional supplement of $4,530, for a total DTC of $12,296.
Stuart Dollar, Sun Life Financial’s Director of Tax and Insurance Planning, explains that this amount is multiplied by the lowest federal plus provincial or territorial tax rates to determine the actual dollar benefit. “Therefore in Ontario, the tax credit of 20.05% (15% federal plus 5.05% provincial) for a disabled child could be worth as much as $2,465.35,” he says.