So what are we talking about here?
Most of the federal tax credits that I describe on my website are based on the foundation of eligibility of the Disability Tax Credit (DTC). This is granted by the government after a successful filing of the T2201 form.
I will warn you that this is a long post. If you are not interested in getting a substantial amount of money from the government, please stop reading now! On the other hand if you are like most humans and you like money, read on and I will provide you with some simple solutions.
Many people are unaware that the tax credits in question begin not on the day the DTC is granted, but rather the effective date, which may be many years in the past or ideally birth. Of course, as readers of my website, you obviously consulted my T2201 guide and ensured that birth was the effective date of the disability. You did read the guide…right? If you were unaware of this, you can certainly re-apply for the DTC with updated information using the form T2201.
Once the DTC eligibility is in hand, many of the tax credits can be back dated to the effective date of the disability, but in most cases, you have to ask for it.
So, one by one, here are some of the tax credits that you can have back dated. Please don’t dismiss this as too hard. The process is very easy and can add up to a substantial amount of money. You can do it with only a couple of hours work and the payout can in some cases be worth tens of thousands of dollars of after tax money. Hey, I would love to get a job that pays $5,000 per hour. Wouldn’t you?
The Disability Tax Credit
This is the only tax credit which can be back dated automatically on request. The new T2201 form has an election (in other words…tick the box) to have the government automatically calculate the amount for you. Why it is an election is beyond me. Why wouldn’t someone want the the government to send them a pile of money? The DTC is presently worth about $2,300. Multiply that by the years owing and that could turn into a lot of coin.
The Child Disability Benefit
Once you qualify for the DTC, the government will automatically calculate a back dated amount for the current and two previous tax years. Prior to those years, you will have to make a request. To make this request is dead simple. Write a letter to the Canada Revenue Agency (CRA) and ask that they back date this benefit to the effective date of the DTC. It’s just that simple!
At over $2,700 per year for a low income household, this tax free benefit can add up dramatically.
All those years of tutoring or therapy can now be claimed. Use the T1-ADJ form to make the request. It’s a simple one page form with no calculations required. Make sure you include receipts and invoices to back this up. Refer to https://asdfunding.com/medical-expenses/ for more information.
Attendant Care Expenses
A sub-section of Medical Expenses which may include hiring a nanny for your child. Refer to https://asdfunding.com/medical-expenses/ for more information.
Fitness and Arts Tax Credit
Even though the federal government has phased out it’s program, you can still claim expenses from years past using the T1-ADJ form. Remember that for each year of DTC eligibility, the government will add $500 to the total just because you have a disabled child. Receipts are required if you have not already submitted them. Refer to https://asdfunding.com/other-tax-credits/ for more information.
Child Care Expenses
You did hang on to your receipts from years past, right? If so, you can now claim up to $10,000 per child eligible for the DTC. Again the T1-ADJ form is the one to use. Refer to https://asdfunding.com/childcare/ for more information.
Canada Caregiver Amount
The Canada Caregiver Amount (which now incorporates the Family Caregiver Amount) can be back dated to 2012 (the inception of the credit) or the effective date of the DTC, whichever is later. No receipts are required and again the T1-ADJ form is used. Refer to https://asdfunding.com/other-tax-credits/ for more information.
Home Buyers Amount
Normally this is for first time home buyers, but if you purchased a home for the benefit of someone who qualifies for the DTC, then you may be eligible for this $5,000 tax credit. The purchase must be made to allow this person to live in a home that is more accessible or better suited to their needs. Once again, use the T1-ADJ form. Refer to https://asdfunding.com/other-tax-credits/ for more information
Home Accessibility Tax Credit
If you had home renovations in 2016 for the benefit of someone who qualifies for the DTC, you may claim up to $10,000 of expenses. Refer to this post for more information. Once again use the T1-ADJ.
Receipts must be supplied to back up your claims for the following credits/deductions:
- Medical Expenses
- Attendant Care Expenses
- Fitness Tax Credit
- Arts Tax Credit
- Home Accessibility Tax Credit
- Home Buyers Amount
- Child Care Expenses
Normally when filing a tax return, you would not include receipts, but rather hold on to them in case CRA asks for them. In this case as you are filing for past credits, you must include them in your letter. Make sure that they are broken down by year and category. It should go without saying, but if you don’t have the receipts, don’t claim the credit.
Registered Disability Savings Plan (RDSP)
OK, so this is a little bit different than the tax credits referred to above, but no less valuable. The RDSP grants and bonds from the government (read that as free money) can be back dated to the effective date of the DTC. All you have to do, is open the RDSP. The Disability Savings Bond (up to $1,000 per year) will automatically be back dated. To receive back dated Government Saving Grants, you will have to make appropriate contributions to the account.
That sounds like way too much work!
I agree! Two hours of work to receive thousands or even tens of thousands of dollars is completely unreasonable. Fortunately, Milburn has created an easier solution for you!
It turns out that you don’t actually have to use the form T1-ADJ. You can just write a letter instead. Too much work still? No problem! I have created a template letter in docx format that you can download here and send to the CRA. You’re welcome!
For God’s sake don’t pay anyone to do this for you. So called “Disability Agencies” will charge you an exorbitant amount to do what you can easily do yourself. Don’t even call them for a quote, unless you enjoy being harassed to use their services.
Once you have completed all of the above, there are three very important steps that you must do:
- Firstly, congratulate yourself for being so clever.
- Secondly, go out and celebrate your good fortune.
- Thirdly, post your experience on whatever parent message board you are using. Let other parents know how valuable this is and encourage them to do the same.