The Disability Tax Credit: A Source of Financial Relief for Families
This post originally appeared on OPPEN CAS. Reprinted with permission. This post has not been edited for style or grammar.
By Marnie Loeb, M.Cl.Sc., S-LP(C), Speech-Language Pathology Advisor at SAC
Did you know that the Canada Revenue Agency (CRA) offers tax breaks for families affected by speech-language disorders, such as childhood apraxia of speech?
The Government of Canada created the disability tax credit (DTC) in 1988 to provide some relief for the costs associated with having a disability. A person with a severe and prolonged impairment in physical or mental functions (such as communication) may be eligible for the DTC.
Applying for the DTC is a three-step process that can be completed at any time of year:
- Download and complete Part A of Form T2201, Disability Tax Credit Certificate.
- Ask a qualified practitioner (for speech impairments, approach a physician or speech-language pathologist) to complete Part B of the form.
- Send the completed form (and any additional information you think is relevant) to your tax centre.
Although the process seems fairly straightforward at first glance, there are many misconceptions about applying and being approved for the DTC. Here are the top 5:
#1: You must have a diagnosis to be eligible for the DTC.
A medical diagnosis is not required to be eligible for the DTC. Many individuals currently receiving the DTC for speech impairments do not have a diagnosis but have significant restrictions on their ability to communicate. Rather than relying on a diagnosis, the CRA uses the information provided by the qualified practitioner about the effects that the impairment has on a person.
#2: My child’s speech disorder is probably not severe enough to receive the DTC.
It is not the severity of the disorder that determines an individual’s eligibility for the DTC, but rather the severity of the impact on their functioning. According to the CRA, “a person is considered markedly restricted in speaking if … he or she is unable or takes an inordinate amount of time to speak so as to be understood by another person … even with appropriate therapy, medication, and devices”. When completing Part B of Form T2201, the qualified practitioner should include a description of the child’s communication skills compared with same-age peers, and specify the effect that the impairment has on daily functioning (e.g., additional time required to implement compensatory strategies, communicate basic needs, and/or use technology to communicate, increased supervision required to ensure the child is safe, additional childcare needs, etc.).
#3: It is best to ask your family physician to fill out the DTC.
Medical doctors may complete the form for all types of impairments; however, the CRA has designated speech-language pathologists as qualified practitioners to certify speech impairments. There is no advantage to having one professional over another complete the DTC form.
#4: Speech-language pathologists can be held liable if the person doesn’t qualify.
Speech-language pathologists are responsible for providing, upon request, sufficient information regarding the individual’s impairment so that the CRA can determine that person’s eligibility. The CRA makes the final decision as to whether or not someone qualifies for the DTC — not the qualified practitioner.
#5: Why bother applying for the DTC? I probably won’t get it and it’s not worth very much anyway.
The amount that a person will receive for the DTC is based on two things: his or her tax return and province of residence. The federal portion, if the person is taxable, is indexed annually and is worth approximately $1800 this year. If the claim is for a child there is the Child Disability Benefit (CDB), which is a monthly payment made to the parents worth up to $2695 per year.
In addition to the significant financial benefit, there are a few other good reasons to apply for the DTC:
- The process for applying for the DTC is fairly simple and doesn’t take much time.
- The CRA does not charge any fees to process the form and you can submit it at any time of year (i.e., not just at tax time).
- If your child has had a speech-language impairment for many years but you haven’t yet applied for the DTC, you can ask for a change to a return for retroactive benefits up to 10 previous calendar years. This means you may receive credits up to and including the year your child was born.
- Eligibility for the DTC can open the door to other federal, provincial or territorial programs such as the registered disability savings plan, the working income tax benefit and the aforementioned Child Disability Benefit.
Families deserve a break for the additional costs associated with childhood apraxia of speech and other speech-language disorders. There are unavoidable additional expenses associated with these disorders — such as paying for private therapies out-of-pocket, travelling to appointments, paying for parking, taking time off work or working reduced hours — that other taxpayers don’t have to face.
Don’t delay in applying for the DTC. It is well worth the effort and parents deserve to be credited for their extra efforts and expenses!
For more information, visit the CRA website where you will find a number of supports to help Canadians complete the DTC, including this video.
SAC members and associates: Want to know more about the DTC? SAC is hosting a FREE Lunch & Learn on November 18, 2015 to review the tax credit and the application process.
Marnie Loeb, M.Cl.Sc., S-LP(C),
Speech-Language Pathology Advisor at SAC
marnie@sac-oac.ca
About the author:
Marnie Loeb is an experienced speech-language pathologist, knowledgeable in both adult and paediatric communication and swallowing disorders. She has worked across all health-care and community settings.
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