Do you have a disability? How about someone in your family? If so, you know that disabilities can make all aspects of life, a little more challenging. Fortunately, the Canadian government offers a Disability Tax Credit to provide some relief.
Whether you were recently diagnosed or have had your disability for years, consider the CRA Disability Tax Credit processing time. It can take a long time to get your money, but the longer you put off applying, the longer it will take to get the refund you need.
Read on to learn more about how long it takes to get your credit and how to apply.
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Who Can Receive the Disability Tax Credit?
Anyone who is a citizen or permanent resident in Canada can get the Disability Tax Credit (DTC). However, you have to pay federal income taxes to get the credit because it is a refund on the income tax you pay.
If you can't work for some reason, you can still get the credit. But you will have to have someone else who does work and who supports you apply for the credit. In this case, you will need to prove that the other person supported you during the years you are applying for the credit.
Whether you're disabled or care for someone who is, the Disability Tax Credit can be an excellent option. The credit can help you pay for assistance and other things that your disability requires. That way, you or your relative can have some more independence.
Who Should Apply for the Tax Credit?
If you're disabled and you pay federal income tax while living in Canada, you should apply for the Disability Tax Credit. You can get the money directly to you, so you don't have to rely on anyone else.
However, if you don't pay federal income tax, you can ask someone in your family to apply for you. Assuming that person has supported you and they have paid federal income tax, they can get the credit. Then, they can give you the money.
Does the Credit Affect Filing Your Taxes?
Applying for the CRA Disability Tax Credit doesn't affect filing your taxes with the Canada Revenue Agency (CRA). While you do need to fill out another line in your tax return, you don't have to wait to file.
As soon as you have all of your documents, you can submit your taxes as if you weren't applying for the credit. However, you may need to remind the CRA of your status once you receive the credit. Then, you can make sure you get the money each year.
If you don't receive the money when you're supposed to, you will need to ask the CRA to reassess your taxes.
How to Apply for the Disability Tax Credit
Once you figure out if you're eligible for the DTC, you can apply for it. You will need to apply for the credit when you develop a disability and every few years to renew your application.
The T2201 form contains the application, and you can download the form online. Once you have the form, you can complete the following steps to get your DTC.
After you download the T2201 form, you will need to complete the first part of the form, Part A. This part of the form asks for your name, address, and other personal information.
If you're not the disabled person, you will need to include some of your information on the form. Either way, this section is relatively short at only a page long.
Once you complete it, you can sign at the bottom of the page.
Talk to Your Medical Practitioner
Next, you will need to talk to your doctor and have them fill it out. Part B is longer, and it goes into detail on you or your relative's condition. The practitioner will need to verify the disabled person's condition regarding hearing, vision, dressing, walking, feeding, and mental functions.
This section is about four to six pages long, and you can save yourself time by going to a medical doctor. While you can go to a specialist, they can only fill out the parts related to their profession, such as vision for an optometrist.
If you can't get to a medical doctor, you can also have an occupational therapist complete most of this section. However, a medical doctor will need to complete another page if you or your relative needs a form of life-sustaining therapy.
A doctor or occupational therapist can complete the last page, which covers how the disability affects your daily life. This could include not being able to walk or being deaf.
Send in Your Application
If you have a My CRA account, you can upload the T2201 form and submit it there. That can be a good option if you don't want to wait to mail the form.
You can also mail the application to your local tax centre. You'll need to wait longer, but mailing is a good choice if you don't have a My CRA account or if you don't have reliable internet.
Either way, you should include some documentation proving your condition along with the application. You can submit a copy of any relevant medical records.
Fill Out a Doctor Questionnaire
In some cases, you may need your doctor to fill out a questionnaire after you submit your application. You may not always need the questionnaire, so try to make your first application as thorough as possible so that the CRA can evaluate it.
Unfortunately, needing a questionnaire can make processing a Disability Tax Credit application take longer. It can add an extra month or two to the regular CRA Disability Tax Credit processing time.
Wait Three to Six Months
If you don't need to fill out a doctor questionnaire, it can take about three to six months to receive your tax credit. This can be annoying the first year, but it can be worth the wait if you need the money.
Some applications may take more or less time, so you may not need to wait as long. If you want to prepare for anything, be ready to wait close to a year, especially if the CRA needs to ask your doctor more questions.
Keep track of when your credit expires so that you can reapply early. Then, you won't have as much time pass without getting the credit.
Get Your Tax Credit
Once the CRA approves your DTC, you can get your credit. The exact amount can vary based on a few factors, including where you live, the severity and history of your impairments, and your age.
Adults will only get the base amount tax credit, but children can also get a supplemental amount. On average, an adult can get about $1,000 to $2,000 per year. Children can get an average of $3,000 to $4,000 per year.
What If They Deny Your Application?
If you apply for the DTC, the CRA may deny your application. They could deny the application for many reasons, such as your condition or your history with that condition.
Luckily, you can write to the CRA to appeal the decision. You can also start a new application, but that does mean going back to a doctor to have them certify the status of your disability.
If your condition changes, it can be worth applying again. The CRA knows that disabilities aren't static, so you can and should apply if your condition worsens or experiences other drastic changes.
You will also need to reapply every few years for the same reason. Getting a DTC once doesn't mean you can get it for life. The CRA requires you to reapply every four to six years to verify that your condition is still serious.
How to Claim the Disability Tax Credit
After you apply and the CRA approves you, you can claim the Disability Tax Credit each year. Fortunately, you don't have to complete a ton of extra steps to claim your DTC.
As long as you file your taxes each year, you can use your tax return to claim the credit. Here are the exact steps you can use to get the credit.
Complete Your Tax Return
Every year that you qualify for the DTC, make sure you do your taxes. As always, you should file your taxes correctly.
While Canada doesn't have estate or inheritance taxes, you will need to pay income taxes. Consider your situation so that you don't miss anything on your return.
If you have complex taxes, you may want to hire an accountant to help you.
Fill Out the Correct Line
When completing your tax return, there will be a section where you can claim your DTC. If you're claiming the credit yourself, you can use line 31600 on your tax return. When claiming the credit for a spouse, you will use line 32600. Line 31800 is where you can claim DTC for any other dependent besides a spouse.
You can put the amount that you qualify for, which can depend on your situation. Then, you can complete the rest of your tax return as normal.
Request a Reassessment
If you forget to fill out the line to claim your DTC, you can request a reassessment from the CRA. You can use the reassessment to remind the CRA that you qualify for the credit, which can be a good option after you initially apply.
A reassessment is also possible if you plan to claim the credit for past years. So if you or your relative had the disability in the past but you never claimed the credit, you can go back 10 years.
You'll need a reassessment for each of the years when you didn't get the credit. But a reassessment can be a good way to get as much money as you can from the government.
Review Your CRA Account
After you claim your CRA Disability Tax Credit, you can make sure that the claim goes through. If you have a My CRA account, you can log into it to check the status and see if you have claimed it.
When working with an accountant, you can also have them check your income tax report. You or your accountant can use the same line numbers based on who the credit is for and who applied.
If you find you didn't claim the credit when you thought you did, you can contact the CRA for a reassessment.
Do You Have to Reapply for the Disability Tax Credit?
Unfortunately, the DTC doesn't apply for life, you so will need to reapply for it every few years. The CRA will approve applications for about four to six years on average, so it can depend on your condition.
If your condition has a chance of improving in some time, the CRA may only approve you for that period. But if your condition doesn't improve, you will still need to reapply when the original credit expires.
However, if your condition is severe, the CRA may approve you and not give an expiration date. This could happen if there's little to no chance of seeing an improvement in your disability.
Will the Tax Credit Affect Government Loans?
If you can't work much, you may rely on loans and other government assistance for your livelihood. Fortunately, receiving the DTC will not affect your ability to get government loans.
The credit is a refund on what you pay in income taxes, and participating in other federal or provincial programs will not affect the credit or vice versa. You can still be eligible for OSAP, AISH, and other programs.
As long as you or whoever applies for you keeps working and paying income taxes, you can get the credit.
CRA Disability Tax Credit Processing Time
If you want to apply for the Disability Tax Credit, you should consider how long you may need to wait to get your money. In some cases, you could get the refund in a couple of months, but it could also take more than half a year.
But don't let the CRA Disability Tax Credit processing time keep you from applying. The credit can be useful, and the sooner you apply, the sooner you can get the refund you need.
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