Disability Tax Credit 101

Disability Tax Credit Basics Its that time of the year again.  The time when the tax man comes to call and we scurry to find any way to hang onto our hard earned dollars that we can. This is also the time of year when I find myself inundated with many questions regarding the Disability Tax Credit (DTC).

I am not an accountant. I am not a lawyer. I am a mother who has been dealing with this issue since the beginning of time (or at least early 2000).  Back then, the DTC was given to some people with diabetes and denied to others. Eventually, it was given to those using insulin pumps but not those on injections. Finally after a long battle, a lot of letters and presentations, this ruling was changed and the discrimination faced by people living with diabetes was removed. (only to resurface in 2018)

The Disability Tax Credit (DTC) is given to people who are unable to perform the “basic acts of daily living” OR who require life-sustaining therapy. While the argument has been made that people with diabetes are not able to perform the basic acts of daily living, the real case has been made that they require life-sustaining therapy.  If they do not take insulin they die. It’s very simple.

So what is the tax credit and why do you want it? Well, it gets you money back on your taxes! Again, I am not an accountant but I think of it as my own extra RRSP or spouse to deduct off of my taxable income.  If you pay in any income tax, you will see a bit more money coming back to you.

If you have no income or very little income, this credit may still be important for you. It may reduce your income to the point that you now qualify for the GST. If you have a child with diabetes, it will mean that he/she now qualifies for a disabled child benefit which adds approximately another $100 to your monthly CTB.

There are still many questions from people who are not sure if they qualify. You can try this short quiz to help you decide. I will also attempt to answer a few questions that come up…

But I’m don’t want to be labeled Disabled.

The Disability Tax Credit? I am not disabled! I don’t want my child labeled this way either.  You are not claiming that you or your loved one is “disabled”.  By applying for this credit, you are stating that you or your loved one requires “life-sustaining therapy” to stay alive. As I have said, no insulin equals no life.

Do children automatically qualify?

Children under 18 years of age who have been diagnosed with type 1 diabetes do qualify for the tax credit.  It is that simple. The time spent on care by the child and parent is felt to easily total over 14 hours. A signature from your doctor regarding diagnosis will entitle you to the credit.  While reducing your taxable income, this credit will also entitle you to the Disabled Child Tax Benefit as well as the CTB you may already be receiving.

My son is now an adult. Does he still qualify?

Yes, he does.  If he has any developmental issues, this definitely means he qualifies and it should be noted on the T2201.  If he does not have developmental issues, but he still tests regularly, injects or boluses, and intensively manages his diabetes care, then he still requires life-sustaining therapy and meets the time requirements.

I have Type 2 Diabetes. Do I qualify?

This one is a little trickier.  If you are no longer producing any insulin and must take insulin injections multiple times per day or use an insulin pump, then you may qualify for the DTC. If your diabetes is still managed through diet, exercise or pills, you will not qualify. Again, you can go through our quiz to see if you may qualify. 

I don’t know what type of diabetes I have but I take needles. Do I qualify?

Again, as long as you are using multiple daily injections, logging, and testing, you most likely will qualify for the DTC.

Is it true you can’t count recovery time?

I was told that you can’t count recovery from lows.  That is right. You can’t but CRA does recognize that you can make errors in your care.  I have a lengthy list of how time is calculated in accordance with CRA guidelines. If you feel that you do these things, then you should easily qualify for the DTC.

Please remember that your doctor must be very aware of what qualifies as therapy and how you manage your time.  Your doctor now is your key to approval. If he or she understands the time you invest in keeping yourself healthy and tells CRA that, then you will get your tax credit.

To help your doctor understand how much time you spend on your care, you can share with him/her activities logged in the DTC workbook

Why do I care about getting the DTC?

Again, this is a credit that gets you money back on your taxes! I am not an accountant but I have come to think of it as my own extra RRSP or spouse to deduct.  This is an amount that comes off of your taxable income before anything else.  If you pay in any income tax, you will see more money coming back to you.

Even if you have no income or very little income, this credit can still be important for you. It may reduce your income to the point that you now qualify for the GST.  If you have a child with diabetes, remember that it will mean that he/she now qualifies for a disabled child benefit which adds approximately another $100 to your monthly CTB.

Do I have to reapply?

It depends on the person processing your file. Yes, it is that arbitrary.  I have heard of families with two people diagnosed with Type 1 diabetes who both applied for the DTC and both were given two different times to reapply.  You could be approved for two years, five years or even for a lifetime.  

Remember the Disability Tax Credit is a tax credit that you receive because you put so much work into keeping yourself of your loved one alive. Life-sustaining therapy is a real part of diabetes.  Injecting, bolusing, testing, calculating is all part and parcel of what keeps us or our loved ones alive. These are not tasks that someone without diabetes has to perform.

If you have any further questions ask your diabetes team, your accountant or contact me and I will do what I can to point you in the right direction.

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