Disability Tax Credit (DTC) & Registered Disability Savings Plan (RDSP) provided by Revenue Canada

Disability Tax Credits assists individuals or families affected by disabilities with financial benefits. It is a non-refundable tax credit used to reduce a person’s taxable income, thereby offsetting additional expenses associated with a prolonged physical, or mental medical condition or impairment. The program also allows tax credits to be applied as far back as ten years, or the date of the diagnosed impairment, whichever is the earliest. Therefore, you may eligible for a tax free refund and, going forward, annual tax credits. In addition, the DTC Program offers a Child Disability Benefit to assist parents where they have a child under 18 that has a disability or impairment.

How do I know if I qualify?

A person does not have to be totally disabled either physically or mentally. However, the severity and duration of the medical condition or impairment has to cause enough restrictions with the Activities of Daily Living (ADL), such as:

  • Vision                Elimination
  • Speaking           Feeding  forrest1
  • Hearing            Dressing  
  • Walking            Performing Mental Functions.

Restrictions may include but not limited to:

  • inordinate amount of time to complete a task,
  • need assistance in eg: dressing, food preparation
  • memory loss, anxiety, depression, poor judgement

Restrictions must occur all of the time, or substantially all of the time. The Cumulative Effects of restrictions with two or more ADLs are also eligible for the DTC Program.. You will need to have a medical professional who knows your impairment well and will complete the Disability Tax Credit Certificate.

Examples of Approved DTC Disabilities and typical refunds:

Multiple Sclerosis  $8,972        ADHD $14,347       Fibromyalgia  $6,280

Parkinson’s  $3,004      Autism $9,579       Depression and Anxiety  $15, 669

So how does one get approved?

Vaughan and Associates are here to help you every step of the way. We will conduct an assessment of your situation to make sure you meet the eligibility requirements. We prepare all the required documents for Revenue Canada. We will represent your case to CRA. and keep you constantly up to date with all activity. Most importantly, we will give you the best possible chance of being approved. 

Registered Disability Savings Plan (RDSP)

The Registered Disability Savings Plan (RDSP) offers generous financial benefits from Revenue Canada and is used to assist Canadians with disabilities to build a strong, secure financial future. Once you are approved with the Disability Tax Credit, you are automatically eligible for the RDSP, if age qualified.

Earnings withinPlan your future the RDSP grow tax free until the money is withdrawn. This means RDSP contributions can grow faster, helping to accumulate more in the plan. The RDSP is exempt from most provincial disability and income assistance benefits. It does not get clawed back and it does not reduce disability benefits payments. Anyone can contribute to a RDSP- family, friends, neighbours, with approval from the account holder.

Financial Benefits

• For every $1 put in an RDSP account, Revenue Canada can match with up to $3! This is the Canada Disability Savings Grant.

• For people living on a low-income, Revenue Canada will put in $1000 each year to a maximum lifetime contribution of $20,000! This is the Canada Disability Savings Bond.

• For people living on a moderate income, they can still receive a partial bond.

• RDSP can be an excellent Estate Planning tool with a lifetime maximum contribution of $200,000.

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