Tax Deductions and Credits
OK, you have taken care of the first two steps. You have:
- Submitted the T2201 to have your child declared disabled and
- You have applied for the Canada Child Tax Benefits. Now what?
First, you can expect to claim your therapy costs as a medical expense. Please note that this doesn't include the administrative costs of your program, such as materials and training. This is why you should claim these costs from the BC government Autism Funding Program. Any medical costs should be claimed by the spouse with the lower income.
Medical expenses will granted by the government as a non-refundable tax credit. In other words, you will receive back about 20% of your costs.
Therapy or Tutoring?
The government seems to prefer the term "tutoring" as opposed to "therapy". Here is the CCRA definition of tutoring:
"Tutoring services used by, and which are supplementary to the primary education of, a person with a learning disability or an impairment in mental functions, and paid to someone in the business of providing such services who is not related to the person being tutored. A medical practitioner must certify in writing that these services are necessary."
I have heard different stories from parents. Most have had success calling it "tutoring" and others have had more luck with "therapy". If you are going to claim for therapy, your child must qualify for the Disability Tax Certificate and the therapy must be prescribed by a doctor. You may have to attach a letter from your doctor along with your tax return. My suggestion would be to fill out the receipts for your therapists using the example on my Files page. This should cover you off for either case.
When you are dealing with CRA, you may be talking with an individual who has never heard of autism and you may have to enlighten them.
You can also claim therapy costs for a therapist who is 18 years old, instead of the BC Autism Funds requirement of 19.
Fitness Credit
Don't forget to apply for the fitness credit as well. If your child qualifies for the disability amount and is under 18 years of age at the beginning of the year, an additional amount of $500 can be claimed provided that a minimum of $100 is paid on registration or membership fees for a prescribed program of physical activity. In other words, if you spend $100, you can claim $600.
To qualify as a fitness expense, the program must be at least 8 weeks long or 5 days consecutive days in the case of children's camps. The standards that the fitness program must meet are relaxed somewhat for disabled children. If the child is eligible for the disability tax credit, activities that result in movement and in an observable use of energy in a recreational context, qualify the program. Refer to CRA - Children's Fitness Tax Credit for more information.
Attendant Care
You may also claim for attendant care if you have hired someone (i.e. a domestic helper) to care for your child. You can claim up to $10,000 (if the child qualifies for the DTC) and still claim the disability amount. Please note that this limit applies to each paying individual. Therefore each spouse can claim $10,000 if this arrangement is supported by receipts.
Attendant care is lumped in with medical expenses as a tax credit, so don't bother trying to claim ABA expenses as attendant care.
Refer to TaxTips.ca for more information
What if I hire someone for respite or babysitting?
That sounds like attendant care to me. I see no reason this can't be claimed. Ensure that you have proper receipts for this service. Refer to CRA - Attendant Care for more information.
Travel Expenses
Some consultants bill for travel expenses on their monthly invoice. The federal government may have an issue claiming this as a medical expense. One way around this, is to claim these costs from the BC Autism Funds program. They have no such issues with travel expenses. Alternatively you may request that your consultant revise their billing procedures such that travel expenses are incorporated into their hourly rates.
If you have to travel more than 40km to access medical care, you may be able to claim travel expenses. If you travel over 80km, you may be able to claim meals and accommodation. Refer to the guide RC4064 for more information.
Organization
One final note: You must be organized!!!! To claim anything from the government you must be prepared to back it up with invoices and receipts. If you can't organize your files, then don't claim them. Please refer to my page Organize your files.