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Disability Tax Credit
TAX TIP for Caregivers
(Yes, yes we know tax season is way next year; however, we just like to share information that may be of some help)
Many families are missing out on a disability related tax credit, which is
intended to help families caring for a child or adult with special needs. It applies to both grown children and aging parents, but this note focuses
on children.
It is somewhat similar to the disability tax credit, which is applicable to a family member whose activities of life are severely restricted and which
can be transferred to a supporting parent or spouse. (If you are not familiar with this tax credit, contact Revenue Canada - Form T2102 or speak with your accountant.)
The tax credit I am referring to is the caregiver tax credit, introduced in 1998. It is a tax credit of $2,386, which returns a standard rebate of taxes paid of approximately $500. (This amount is fixed, regardless of taxable income level, since it is a credit not a deduction.)
The caregiver amount is available to any tax payer who "maintains a self-contained domestic establishment which at some time during the year is the ordinary place of residence of yourself and another person who is:
- your child or grandchild who has reached 18 years of age or older and is
dependent on you by reason of his or her physical or mental infirmity and
whose income is less than $11,661.
The various defined terms such as usually resident, dependent and income will not be discussed here. In a nutshell, any child receiving Ontario Disability Support (ODSP) benefits and who resides with his parents on a continuous or occasional basis would fall into this category.
Since maximum annual ODSP benefits are ($930 x 12) $11,160 or ($708 x 12) $8,496, such a child would financially qualify as a dependent; either parent can elect to receive the tax credit.
In addition, since the tax credit was introduced in 1998, the parent can back-file for the missed years using a T1 Adjustment form. This is a simple process, and can be done by going to the Canada Customs and Revenue Agency website and printing off one copy of the form for each year of back filing.
Check here to go to the T1 Adjustment Request Form
http://www.ccraadrc.gc.ca/E/pbg/tf/t1adjeq/README.html
or check here for information on the Caregiver Amount.
http://www.ccra-adrc.gc.ca/eservices/tipsonline/infotax/mess315-e.html
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Family Alliance Ontario
c/o Hamilton Family Network
22 Leeming Street
Hamilton, ON Canada L8L 5T3
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© Copyright 2007 Family Alliance Ontario.
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