Did you know the Disability Tax Credit (DTC) can help you access more than just the Registered Disability Savings Plan (RDSP)?
If you or someone you know has the DTC, there are lots of other tax-related disability supports that you or they may be eligible for. Please note that you will need to file your taxes to access most of these supports; information on how to get free assistance with tax filing is available here and at the end of this article.
While the benefits of the DTC are all designed in recognition of the higher costs that people with disabilities face, different supports serve different functions. Some benefits help reduce taxes owing. Others provide individuals with higher tax returns. Some can even come in the form of financial payments.
Below, we discuss some key disability supports that may benefit you if you have the DTC and file your taxes:
For workers
People with a low income who get most of their money from employment may also receive the Canada Workers Benefit—a refundable tax credit that can increase your yearly tax return. If you have the DTC, you can get up to $737 as a Disability Supplement on top of the CWB amount.
For caregivers
- Child Disability Benefit Families with children with modest incomes may already be receiving the Canada Child Benefit, a monthly payment that can help with extra living costs. If you have a child who qualifies for the DTC, you may receive an additional $2,985 ($248.75 per month) in Child Disability Benefit payments.
- Canada Caregiver Credit (CCC) If you financially support a family member with a physical or mental impairment, you can claim the Canada Caregiver Credit to reduce the taxes you owe. If the person you are supporting is approved for the DTC, you do not need to provide any medical documents to receive the credit.
For those with added health-related expenses
- Medical Expenses Certain medical expenses, including some prescription therapies and a personalized therapy plan, can only be claimed on your tax return if you have the DTC.
- Disability Supports Deduction If you have medical expenses that you need in order to go to work, school, or to do research, you may be able to claim some of these expenses as a Disability Supports Deduction.
For homeowners
- Home Buyer’s Amount People eligible for the DTC do not have to be a first-time home buyer to qualify for the Home Buyer’s Amount—a non-refundable credit that allows you to claim up to an additional $10,000 for a home purchased in the 2022 tax year, which can mean a tax reduction of approximately $1,500.
- Home Accessibility Tax Credit People who need to make renovations to make their home more accessible can now claim $20,000, which would provide a tax reduction of up to $3,000.
For those with trusts and RDSPs
- Trusts If you are setting up a trust for a person who has the DTC, you may be able to change the trust to a “Qualified Disability Trust”, or elect the individual with the DTC to the “Preferred Beneficiary” in order to access lower tax rates.
- Registered Disability Savings Plan (RDSP) The RDSP is a long-term savings plan for people who qualify for the DTC. If the person with the disability (the “beneficiary”) opens an RDSP before the end of the year in which they turn 49, they can qualify for up to $90,000 in government grants and bonds. To determine grant and bond amounts, beneficiaries should file their taxes for at least two tax years prior.
In addition to the benefits outlined above, it is anticipated that the DTC will play a critical role in determining eligibility for the proposed Canada Disability Benefit. Now, more than ever, it is important to ensure that everyone who is eligible can access the DTC.
Plan Institute and our partners in the Access RDSP program, Disability Alliance BC (DABC) and the BC Aboriginal Network on Disability Society (BCANDS), can provide support to help people access the DTC and the RDSP. For assistance, call Access RDSP at 1-844-311-7526 or email helpline@planinstitute.ca.
We know that filing taxes can be complicated. If you are in need of support with tax filing, call Tax AID DABC at 236-417-1717, email taxaid@disabilityalliancebc.org or schedule an appointment online. DABC’s offices are located at #1450-605 Robson St. Vancouver BC, V6B 5J3.