As the Registered Disability Savings Plan (RDSP) received royal assent and continues to gain momentum within the provinces, it is becoming increasingly likely that the RDSP may be available by late 2008 (as forecasted by the federal government).
It is now becoming more and more important for people to apply for the Disability Tax Credit (DTC) which is the eligibility criteria for the RDSP. If you want to be able to set up a RDSP for you or your family member, it will be essential that you apply for the DTC (before or along with this upcoming 2007 tax return).
This means that if the RDSP becomes available in late 2008, you or your family member will be able to set up a RDSP and begin receiving the Canada Disability Savings Grant and Canada Disability Savings Bond as soon as possible. Only those with a DTC will be eligible to establish a RDSP and receive the Grant and Bond in 2008. The Canadian Revenue Agency looks at your prior year’s tax return and DTC for the RDSP and corresponding Grant and Bond.
How do I apply and qualify for the Disability Tax Credit?
For this particular credit you will need to get the T2201 Disability Tax Credit Certificate from the Canadian Revenue Agency (CRA) and apply. Unlike many of the other available credits, rebates and deductions, this tax credit cannot be applied for on your tax return.
In order to receive a copy of the T2201 form you should visit the CRA’s website (www.cra.gc.ca/forms) or call 1-800-959-2221. Once you download or receive your certificate, you will notice that there are two portions to the T2201 form, Part A and Part B. Part A is the personal information that must be filled out by the applicant (or guardian), while Part B must be filled out by a qualified practitioner who will certify the effects of your impairment. The CRA defines a “qualified practioner” as a certified medical doctor, optometrist, audiologist, occupational therapist, physiotherapist, psychologist and a speech-language pathologist.
Once you have completed your portion of the form and your qualified practitioner has completed their portion of the form, you can send it in to your local CRA tax office (check http://www.cra-arc.gc.ca/contact/tso-e.html or call 1-800-959-8281). You can send your T2201 Disability Tax Credit Certificate any time, but it should be sent before or with your tax return so you can be accepted as soon as possible. By sending your form before you file your tax return, you may prevent a delay in your assessment. The CRA will review your application before they assess your return.
Once the Disability Certificate is obtained and accepted by the Canada Revenue Agency, it will continue to be valid for each subsequent tax year until the person’s condition changes. Therefore, it is not necessary to obtain a new Disability Certificate each year, unless so requested by the CRA.
So make sure you or your loved one apply for the Disability Tax Credit!