If you become disabled, there can be several tax issues that come into play. Tax law provides various types of assistance and support to disabled taxpayers and I will outline each of these below.
If you or a dependant are unable to complete a tax return due to a disability, it will have to be completed by someone else. If legally capable you can fill out tax form T1013- Appointing or Canceling a Representative, which would allow that person to fill out that form.
There are various tax benefits available when a person is considered disabled. To receive these benefits a Disability Certificate will have to be filed with the Canada Revenue Agency (CRA). The Income Tax Act has criteria for what qualifies as a disability, and you will need to have a doctor or qualified medical practitioner complete form T2201.
Various tax deductions and credits may be claimed by a disabled person, or in some cases, his or her legal guardian. The rules related to these benefits can be complex. You should consult a qualified tax professional when planning to make claims. I am happy to provide you with more information.
Attendant Care Deduction
If you meet the definition of a disabled person and require the services of an attendant to enable you to work, you may be able to claim some or all the costs. To qualify the attendant must be at least 18 years old and not a spouse. The deduction cannot be claimed if the expenses were claimed for the medical expense tax credit. This is explained below
Medical Expense Tax Credit
A credit for medical expenses not covered by any other sources is available. The amount for the credit is expenses in excess of the lesser of $2,237 or 3% of your net income in 2016. In certain cases, the credit can be transferred. Provincial credits are also available.
Registered Disability Savings Plan (RDSP)
RDSP’S are savings plans intended to provide long-term financial security for someone who is disabled. A disabled and legally competent adult can set up the plan or one can be set up on behalf of a disabled minor. The lifetime contribution limit is $200,000, and the contributions can be made by anyone. Although the contributions are not tax deductible they grow tax free while held in the plan. The government provides financial assistance through Disability Savings Grants, which match contributions. The government also provides assistance for low income families through the Disability Savings Bond. If you would like more information on RDSP’s please contact me. I’d be happy to meet.