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
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