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Qualifying for disability tax credit an uphill battle for many amid spike in CRA rejections


In the 2016-17 fiscal year, 45,157 disability tax credit applications were rejected compared to 30,235 the previous year.Peter J. Thompson/National Post files

One of the most valuable tax benefits for persons with disabilities is the disability tax credit (DTC), which can be worth between $1,500 to $2,700 of combined federal and provincial tax relief, depending on your province of residence. An estimated 1.8 million Canadians over the age of 15 live with a severe disability and last year, approximately 770,000 individuals claimed the DTC on their income tax returns, representing a combined tax savings exceeding $1.3 billion.

Qualification for the DTC also entitles you to become a beneficiary under a registered disability savings plan. An RDSP helps individuals with a disability (or their parent or caregiver) save for the future by putting money into a fund that grows tax-free until the beneficiary withdraws the funds. In addition, an RDSP can attract valuable government grants and bonds totaling up to $90,000, depending on family income.

Qualifying for the DTC can be challenging, depending on the type of disability. To qualify, the individual with the disability (or their legal representative) must complete Part A of Form T2201, Disability Tax Credit Certificate. Part B must then be filled out by a medical practitioner. Even with the form properly completed and certified, there’s no guarantee your application for the DTC will be accepted by the Canada Revenue Agency.


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