Get back taxes that you should never have paid
It is quite possible that you may not be keeping as much of your hard earned money as you are entitled to keep. Many people in the special needs community are giving the Government thousands upon thousands of dollars in tax revenue that should stay in our community. But this doesn’t have to continue. By following a few simple steps, people with disabilities and their supporting family members can claim the DTC from this year onward and for up to 10 years in the past where they have not claimed the credit. In addition, caregivers can also claim back for the Caregiver Tax Credit provided that your dependent is over age 18 in each of the years being claimed up to and including the 2016 tax year. These credits could result in you receiving tax refunds of $10,000, $18,000 and even much more when combined with the other tax credits or deductions that you may have missed over the years and which are still available to you.
Once the DTC has been approved by Canada Revenue Agency, a number of things can happen. If you were able to take advantage of the new T2201 form section where you can tick the box in Section 3, CRA will re-evaluate your returns from prior years and if appropriate, they will issue a refund to you. If you are not able to take advantage of Section 3 then you can commence the back filing process.
The back-filing process is very simple; so simple in fact that virtually anyone can do it. The first and easiest method is to simply mail a letter to Canada Revenue Agency outlining the details of your claim and asking that they review your file for the past 10 years.
The alternative method is to acquire the Canada Revenue Agency T1 Adjustment Request form. Since this is a more difficult method, we suggest that if you wish to re-file in this manner, you arrange for an Accountant to do it for you.
If you are not comfortable with submitting a letter to Canada Revenue
Agency asking for a review of previous years’ tax returns, then by all means talk to an Accountant and have him or her re-file for you. However if you are interested in saving your hard earned money and are willing to do a little work on your own, then simply mail a letter to Canada Revenue Agency outlining the details of you claim and asking them to review your returns. CRA will do the work for you.
As a general rule of thumb, if an ODSP recipient lives with his or her family and receives support from them, the family member who provides support to the ODSP recipient ordinarily would be able to get a transfer of the full Disability Tax Credit. If the ODSP recipient earns other income, there are some restrictions which must be taken into account. Please refer to Canada Revenue Agency tax guides if this is your situation. In addition, if the family member provides some or all of the person’s food, shelter or clothing on a regular and consistent basis the credit may be able to be transferred even if the person does not live with the family member.
3. Tax Deductions, Credits and Benefits:
The next section of this guide relates to the various deductions, credits and benefits that are available to people with disabilities and their caregivers. We will list the categories that are available to people with disabilities themselves and categories that are available to the caregivers of people with disabilities. We suggest that you scan each of the descriptions and if it sounds like that particular deduction may apply to you and your situation, then you can investigate further into the details of the rules and regulations.
Deductions, Credits and Benefits Available to People With Disabilities Themselves:
- Home Accessibility Tax Credit: People with disabilities who qualify for the Disability Tax Credit as well as their supporting family members who are qualified to claim the disability amount for the individual may be able to claim a non-refundable tax credit for up to $10,000 per year for renovations made to a residence. The renovations must be made to allow the person to gain access to the home or to be mobile or functional within the home; or to reduce the risk of harm within the home or in accessing the home. Further details are available at:
- Home buyers’ amount: A credit of up to $5000 applies. A person qualifying for the DTC does not have to purchase a first home to qualify but the purchase must be to allow the person with the disability to live in a home that is more accessible or better suited for their needs.
- Home Buyer’s Plan: A person who qualifies for the Disability Tax Credit or a blood relative can withdraw up to $25,000 from their RRSP to purchase a home and it doesn’t have to be a new property nor the first property. The home need only be more accessible or in an environment that is better suited to his personal needs.
- CRA Auto-fill Feature: Canada Revenue Agency has created a service for tax returns that will assist all taxpayers including those with disabilities. This new service will automatically fill in certain parts of the income tax return with information that CRA already has on file. CRA says that it is able to populate a taxpayer’s return with things such as T3, T4 and T5 slips, RRSP information, Home Buyers’ Plans, Capital Gains and Losses to name a few. A full list can be found at http://www.cra-arc.gc.ca/auto-fill/ and can be used when a return is filed online with certified tax preparation software.
- Disability Supports Deduction: If you are a person with a physical or mental impairment you may be able to deduct disability supports expenses you incurred in the year to work, go to school, or to do research for which you were paid. The Disability Supports are actually claimed as medical expenses on your Income Tax Return and some are:
- Attendant care services
- Bliss symbol boards
- Braille note-taker devices
- Braille printers, synthetic speech systems, large print-on-screen devices
- Deaf-blind intervening services
- Devices or software
- Electronic speech synthesizers
- Job coaching services
- Note-taking services
- Optical scanners
- Page turner devices
- Reading services
- Real-time captioning or sign-language interpretation services
- Talking textbooks
- Tutoring services
- Voice recognition software
- Other deductions: Misc amounts found at http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/232/menu-eng.html relating to misc. items
- Disability Amount: As previously mentioned, this is a non-refundable disability tax credit which can reduce the amount of tax that a person with a disability has to pay.
- Spouse or Common-Law Partner Amount: If a person supported a low income spouse or common law partner, a deduction is available.
- Working Income Tax Benefit: This benefit may be available to individuals and families with low income. In 2018 it includes a basic claim plus a supplemental benefit for individuals who qualify for the Disability Tax Credit. These amounts may be adjusted depending on where you live in Canada and on your family income levels. Further information can be found at:
- Disability-Related Employment Benefits: If an employer provides benefits or allowances to an employee who has a disability, such as transportation costs or attendant services, the benefit may not be taxable in the hands of the person with the disability.
- Medical Expenses: See the Medical Expenses section to follow.
- Refundable medical expense supplement: If you are working, have low income and high medical expenses you may be able to claim a maximum amount of $1,222 in 2018.
Deductions, Credits and Benefits Available to Caregivers of a Person With a Disability:
- The Canada Caregiver Credit (CCC): Please see page 4 of this guide for a description of the Canada Caregiver Credit that may be available to your family.
- Child Disability Benefit: Families with children under age 18 who qualify for the disability amount may be eligible for the Child Disability Benefit. It is income tested based on family income and the maximum available in the 2018 tax year is $2771. Therefore, the benefit provides up to $230.91 per eligible child. This amount is calculated automatically by Canada Revenue Agency.
- Child Care Expenses: If you have paid someone to look after your child who qualifies for the Disability Amount, you may be able to deduct up to $11,000 for child care expenses and the age of the child can exceed 16.
- Amount for Eligible Dependant: If you did not have a spouse or common- law partner and you supported a dependant with whom you lived in a home you maintained you may be able to claim this amount.
- Disability Amount Transferred From a Dependant: If the DTC is not required by the person with a disability to reduce their taxable income to zero, then it may be transferred in whole or in part to a family member who supplied some or all of the basic necessities of life such as food, shelter and clothing to the person. The person with the disability does not necessarily have to live with the family member in order to make the transfer.
- Adoption Expenses: You can claim an amount for eligible adoption expenses related to the completed adoption of a child who is under 18 years of age that were incurred during the adoption period. The maximum claim for each child is $13,810 for the 2018 taxation year.
This is a major section of potential deductions that may be available to people with disabilities themselves or to caregivers of people with disabilities. You can claim eligible medical expenses paid in any 12-month period ending in 2018 and not claimed by you or anyone else in 2017. If you are claiming for yourself, your spouse or common law partner or for a child under the age of 18, you claim the expenses on line 330 of your return. The expenses you claim for all other dependants is done on line 331 of your return. The amount claimed for a person with a disability is reduced by formula based on his or her income. There is no maximum amount that can be claimed in any given year.
You do not have to send any supporting documents relating to the Medical Expense claims to Canada Revenue Agency when you submit your return. This applies to income tax returns submitted electronically or those submitted on paper. You still need to keep them for at least 6 years in case CRA asks to see them at a later date. Those receipts must show the name of the company or individual to whom the expense was paid. Receipts for attendant care or therapy paid to an individual should also show the individual’s social insurance number.
If you are submitting a claim for medical expenses, speak with your Pharmacy and ask for a print out of your prescriptions for 2018. All Pharmacists in Ontario and some other provinces are required to provide you with a listing free of charge. This can be useful in preparing your returns.
The following is a partial listing of eligible medical expenses. It is not exhaustive. Once again, we suggest that you scan each of the descriptions and if it sounds like that particular deduction may apply to you and your situation, then you can investigate further into the details of the rules and regulations.
- Acoustic coupler – prescription required.
- Air conditioner – 50% of the amount paid up to $1,000 for a patient with a severe chronic ailment, disease, or disorder – prescription required.
- Air filter, cleaner, or purifier – paid for someone to cope with or overcome a severe chronic respiratory ailment or severe chronic immune system disorder – prescription required.
- Altered auditory feedback devices – for treatment of a speck disorder – prescription required.
- Ambulance service to or from a public or licensed private hospital.
- Animals (Service) – the cost of a specially trained dog or other animal for use by someone who is blind, profoundly deaf, or has a severe and prolonged physical impairment that markedly restricts the use of their arms or legs, or a person who is severely affected by autism or epilepsy or a person who has severe diabetes (for expenses incurred after 2013). As of the 2018 taxation year, the Medical Expense Tax Credit has been expanded to allow expenses related to service animals that are trained to perform specific tasks for a person with a severe mental or psychiatric impairment that help the person cope with the impairment.
In addition to the cost of the animal, the care and maintenance (including food and veterinarian care) are eligible expenses
Reasonable travel expenses for the person to attend a school, institution, or other place that trains him or her in handling such an animal (including reasonable board and lodging for full-time attendance at the school) are eligible expenses. The training of such animals has to be one of the main purposes of the person or organization that provides the animal.
- Assisted breathing devices that supply air to the lungs under pressure, such as a continuous positive airway pressure (CPAP) machine or mechanical ventilator.
- Artificial eye or limb
- Attendant care expenses
- Audible signal – prescription required.
- Baby’s breathing monitor designed to be attached to an infant to sound an alarm if the infant stops breathing.
- Bathroom aids to help someone get in or out of a bathtub or shower or to get on or off a toilet – prescription required.
- Bliss symbol boards
- Blood coagulation monitors – the amount paid for the purchase including disposable peripherals such as pricking devices, lancets, and test strips for a person who requires anti-coagulation therapy – prescription required.
- Bone conduction receiver
- Bone marrow transplant
- Brace for a limb
- Braille note-takers -prescription required.
- Braille printers, Synthetic Speech Systems, Large Print-on-Screen Devices – designed only to assist a person who is blind to use a computer – prescription required.
- Breast prosthesis – prescription required.
- Cancer treatment
- Catheters, catheter trays, tubing, or other products required for incontinence caused by illness, injury or affliction.
- Certificates – the amount paid to a medical practitioner for completing and providing additional information in regard to Form T2201 and other certificates.
- Chair – power-operated guided chair to be used in a stairway, including installation – prescription required.
- Cochlear implant
- Computer peripherals designed exclusively to be used by someone who is blind – prescription required.
- Cosmetic surgery – purely cosmetic procedures are eligible if incurred before March 5, 2010. After 2010, only for procedures for medical or reconstructive purposes.
- Deaf-blind intervening services
- Dentures and dental implants
- Devices or software designed to be used by a blind person or with a person with a severe learning disability to enable them to read print – prescription required.
- Diapers or disposable briefs
- Driveway access
- Drugs and medical devices – purchased under Health Canada’s Special Access Program.
- Elastic support hose – prescription required.
- Electronic bone healing device – prescription required.
- Electronic speech synthesizers – prescription required.
- Electrotherapy Devices – for the treatment of a medical condition or a severe mobility impairment – prescription required.
- Environment control system (computerized or electronic) – prescription required.
- Extremity pump – prescription required.
- Fertility-related procedures – amounts paid to conceive a child.
- Furnace – prescription required.
- Gluten-free products – incremental cost
- Group home
- Hearing aids
- Heart monitor – prescription required.
- Hospital bed – prescription required.
- Hospital services – public or private, that are licensed as hospitals by the province, territory or jurisdiction they are located in.
- Ileostomy and colostomy pads including pouches and adhesives.
- Infusion pump including disposable peripherals – prescription required.
- Injection pens – such as insulin pens – prescription required
- Insulin or substitutes – prescription required.
- In Vitro fertility program – paid to a medical practitioner or public or licensed private hospital.
- Kidney machine
- Laboratory services – prescription required.
- Large-print on-screen device – prescription required.
- Laryngeal speaking aids
- Laser eye surgery
- Lift or transportation equipment – prescription required.
- Liver extract injections – prescription required.
- Medical marijuana or marijuana seeds – for medical purposes.
- Medical Practitioner
- Medical services outside Canada
- Moving expenses – to housing that is more accessible to the person to a maximum of $2864 in Ontario in 2018
- Needles and syringes – prescription required.
- Note-taking services
- Nursing home
- Optical scanner – prescription required.
- Organ transplant
- Orthodontic work
- Orthopaedic shoes, boots, and inserts – prescription required.
- Osteogenesis stimulator (inductive coupling) – prescription required.
- Oxygen concentrator
- Oxygen and oxygen tent or other equipment necessary to administer oxygen – prescription required.
- Pacemakers – prescription required.
- Page-turning devices – prescription required.
- Personalized therapy plan – the salaries and wages incurred after 2013 for designing a personalized therapy plan are eligible medical expenses if certain conditions are met.
- Phototherapy equipment
- Premiums paid to private health services plans
- Pre-natal and post-natal treatment
- Prescription drugs and medications
- Pressure pulse therapy devices – prescription required.
- Reading services
- Real-time captioning
- Rehabilitative therapy
- Renovating costs
- Respite Care services
- School for people with an impairment in physical or mental
- Service Animals – (see Animals section)
- Sign-language interpretation services
- Spinal brace
- Standing devices – prescription required.
- Talking textbooks – prescription required.
- Teletypewriters – prescription required.
- Television closed caption decoders – prescription required.
- Tests – prescription required.
- Therapy – prescription required.
- Travel expenses – in excess of 40 km one way and for medical services not available near your home transportation costs are deductable
- Travel expenses – in excess of 80 km one way you can deduct transportation costs and some accommodation, meal and parking expenses.
- Treatment centre for addictions
- Truss for hernia
- Tutoring services
- Vaccines – prescription required.
- Van – 20% of the amount paid for a van that has been adapted up to $7159 in Ontario for 2018.
- Vehicle modification to permit someone confined to a wheelchair to gain independent access to and drive the vehicle – prescription required.
- Vision devices – eyeglasses etc – prescription required.
- Visual or vibratory signalling device – prescription required.
- Vitamin B12 injections – prescription required.
- Voice recognition software
- Volume control feature – prescription required.
- Walking Aids – prescription required.
- Water filter, cleaner, or purifier – prescription required.
- Wheelchairs and wheelchair carriers
- Whirlpool bath treatments
- Wigs – prescription required
If you think that any of these items may apply to your particular situation, please follow the following link for more details.
Non-eligible Medical Expenses Include the Following:
- athletic or fitness club fees;
- birth control devices (non-prescription);
- blood pressure monitors;
- cosmetic surgery – expenses for purely cosmetic procedures including any related services and other expenses such as travel, incurred after March 4, 2010,cannot be claimed as medical expenses. Both surgical and non-surgical procedures purely aimed at enhancing one’s appearance are not eligible. These non-eligible expenses include the following:
- hair replacement procedures;
- filler injections (for removal of wrinkles);
- teeth whitening.
An expense, including those identified above, may qualify as a medical expense if it is necessary for medical or reconstructive purposes, such as surgery to address a deformity related to a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease.
- diaper services;
- health plan premiums paid by an employer and not included in your income;
- health programs;
- organic food;
- over-the-counter medications, vitamins, and supplements, even if prescribed by a medical practitioner;
- personal response systems such as Lifeline and Health Line Services;
- the following provincial and territorial plans:
- Alberta Health Care Insurance Plan
- Manitoba Health Plan
- Medical Services Plan of British Columbia
- New Brunswick Medicare Division of Provincial Department of Health
- Newfoundland Medical Care Plan
- Northwest Territories Health Insurance Services Agency of Territorial Government
- Nova Scotia Medical Services Insurance
- Ontario Health Insurance Plan
- Prince Edward Island Health Services Payment Plan
- Quebec Health Insurance Board (including payments made to the Health Services Fund)
- Saskatchewan Medical Care Insurance Plan
- Yukon Territorial Insurance Commission; or
- Travel expenses for which you can get reimbursed.
In conclusion, we trust that this guide has been useful to you. Again, remember that we are not providing Accounting or Tax Planning or preparation advice. If you have any questions regarding your Income Tax Returns, please contact a Tax Accountant or Canada Revenue Agency for assistance.