Here is another article from the Big Cajun Man, author of The Canadian Personal Finance Blog entitled Disability Tax Credit: Please Do It Yourself .
It is a good reminder to all to stay away from the online “Disability Experts” who want to take your money and leave you with no value added.
Those of you about to file a T2201 (Disability Tax Credit Certificate) for the first time would be well advised to review the T2201 Guide. It outlines some of the errors that parents and their doctors make as well as answering many frequently asked questions.
Version 2 includes a sample “Impact Statement” written by one of our keen parents. It provides guidance for doctors who are struggling for words or possibly a complete statement for the medical professional. It should not be copied, but it provides a starting point for a parent who needs to describe their child’s disability.
The pdf can be downloaded from my Files page.
This form will assist your employer to determine the amount of tax to withhold from your pay. This form is mandatory for new employees and should be updated when there is a change in your circumstances. As the parent of a disabled child qualifying for the Disability Tax Credit you will elect to have these tax credits reduce your regular income tax withheld. The alternative is to effectively give an interest free loan to the government as you wait to have these amounts refunded after you file your income tax return.
They will either be supplied by your employer or you can download them at TD1 Forms for 2014
Firstly under Line 2 you will claim $2,255 for each child and $2,058 for your infirm child. The latter refers to the Family Caregiver Amount that you will claim on your tax return.
On line 12 you will claim $7,766 for 2014. This is for the “Disability Amount Transferred from a Dependent”. You could claim the disability supplement but this will be reduced if you claim child care or attendant expenses. Best to be safe and leave it at $7,766. Likewise on the provincial TD1BC form you would similarly claim $7,402 on Line 11.
Who creates the invoices for the therapy provided for your child? The Behaviour Consultants (or agency) will generally submit an invoice on a monthly basis for the Autism Funds Unit (AFU) or direct payment from you. But what about your Behaviour Interventionists (BI’s)? You should take on the responsibility of making the monthly invoice. Why?
I have my therapists complete a hand written time sheet which are collected at the month end and used to create the invoices that will be submitted to the AFU or held for tax purposes. I track the AFU funds on a spreadsheet or hand written table to ensure funds are available and set aside for that therapist. It sucks away team morale if the BI’s aren’t paid because you weren’t paying attention to how much was in the account.
You must pay particular attention to the “services rendered”. Firstly the AFU has specific terms they want used. Do you think they are going to pay for a particular day if the BI enters the service rendered as “Bike riding with little Johnny”? I think not! For a more detailed discussion of terms that should be used for the AFU invoice refer to the ACT Autism Manual for BC Chap 5.
After the AFU funds are used, you need to think about taxes. Services that can be claimed include:
Therapists who construct the invoices themselves have no awareness of your tax situation and will screw it up by entering services such as:
All of the above services are ineligible for tax purposes and hence the need for you to control the invoices.
So how would this work for you? For starters, you may want to claim funds from the AFU to the $22,000 (or $6,000) limit. Once those funds are exhausted and both parents are working (and hence eligible to claim child care expenses) you will create invoices listing “Child Care” as the service provided. Remember you can claim up to $10,000 (assuming the child qualifies for the Disability Tax Credit). This is a tax deduction and will usually provide the best tax refund. After these limits are reached you can then assign the rest of the therapy as “Tutoring” which is a medical expense.
If you have a live in domestic helper, the same principles apply. Firstly use the $10,000 child care expenses and then apply the rest to “Attendant Care” which will be added to the medical expenses.
Are you starting to see why you should create your own invoices and receipts? It’s your money and no one better than yourself understands what you should be claiming. Remember that each invoice should be matched with a proper receipt with the required information.
Now you could ask your BI’s to make their own invoices using certain rules, but I guarantee they will screw it up. You will then expend twice the effort to correct their mistakes. It’s much easier to do it right the first time.
I have provided some examples in my Files page of invoices you can create. It can be hand written in table format (keep it neat!) or constructed using a spreadsheet (my personal favourite).
The Federal budget of 2008 promised that autism services would be exempt from GST. The reality thus far has been mixed. Without getting into all the technical details, the bottom line is that some Behaviour Consultants are continuing to charge GST on their invoices.
We have some people in the autism community who have been working with the federal government to resolve this, but the wheels of government turn very slowly.
In the meantime you can apply for a refund of GST paid to Behaviour Consultants during the previous two years. The process is detailed here. The two year window counts back from the time they receive your paperwork at the GST center. Realistically you can’t do it every two years and get all of your money refunded because of the time constraints.
I recommend once a year, gathering your paperwork and sending in for a refund. To me this strikes the best balance between getting your money back and not being overly burdened with paperwork.
We all truly hope this will be a temporary solution and the federal government will live up to it’s commitment in the 2008 budget to exempt autism services from the GST. Standby for further!
Autism Funding in BC 