Disability Tax Credit


March 18th, 2010

The Disability Tax Credit seems to be an often over-looked tax credit. ¬†That’s probably because it’s one of those credits that sort of sneaks up on a person. ¬†Frequently, though certainly not always, this credit applies to seniors who are slowly becoming infirm. ¬†Let’s use an example. ¬†This example is based strictly on a fictional situation.

Let’s use a senior we’ll call Mr. John Doe (always a nice safe name.) ¬†Mr. Doe has been living by himself for the last 18 years. ¬†He retired from his job 15 years ago, and his now 82. ¬†Mr. Doe is in good health, but over the last few years his hearing has begun to worsen. ¬†Now, even with the use of a hearing aid, he is not able to follow a conversation very well. ¬†This hearing impairment didn’t happen overnight, but rather gradually, over the last number of years.

At a certain point, Mr. Doe will qualify for the Disability Tax Credit.  This credit will save him as much as $1,496 in taxes per year.  To qualify for the Disability Tax Credit, Mr. Doe will need to visit his doctor or audiologist and have them complete form T2201.  This T2201 is then sent to the government, who determines whether or not Mr. Doe will qualify for the Disability Tax Credit, and for which years he qualifies.  Once Mr. Doe qualifies he can claim the Credit on his tax return, and does not need to send in a new form unless his condition improves, or if the government asks him to send in a new form.

As you can see from the above example, the challenge sometimes is to determine exactly when to apply for the Disability Tax Credit.  There are a number of other medical conditions with which you may qualify for the Disability Tax Credit, including speaking, walking, feeding, dressing, hearing, mental functions, and others.  Click here for a full list.

If you think you may qualify for the Disability Tax Credit, consult with your doctor.  Most doctors are very familiar with these forms.  Also, if you know of a friend or family member who may be eligible and is not aware of this credit, you should suggest they consider applying.  After all, it could save them nearly $1,500 / year!

Filed under: Personal Tax by David Boese No Comments »