What is the Disability Tax Credit?
In Canada, people with disabilities can face a lot of challenges when it comes to money and financial wellbeing. They often don’t have enough resources and struggle to find jobs, while the government doesn’t provide enough support to help them. As a result, many people with disabilities end up living in poverty, which can be made worse because of the extra cost that can come with living with a disability.
The Disability Tax Credit (or DTC for short) is a financial benefit that remains very underutilized today. This non-refundable tax credit is about helping with some of the increased costs that come with having a disability. It can help people with physical or mental impairments, or their supporting family members, reduce the amount of income tax they may have to pay. By reducing the amount of income tax paid, the DTC aims to offset some of the extra costs related to an impairment.
You may be eligible for the DTC if a medical practitioner certifies that you have a severe and prolonged impairment, significant limitations in multiple basic functions, or receive therapy to support a vital function. This includes:
- Mental functions
- Eliminating (bowel or bladder functions)
- Life-sustaining therapy
Talking to a medical professional is an important first step in applying and qualifying for the DTC. But along with this tax credit, there are further benefits to those who qualify by way of a Registered Disability Savings Plan (RDSP). Learn more RDSPs is our next blog, and talk with Statera Financial Planners who can help you understand how to capture the most benefit when you or a family member is living with a disability!