When filing your taxes, there are numerous personal tax credits available that will help you offset the federal (and sometimes provincial) taxes owing on your tax return. We previously discussed how tax credits affect your balance owing. In this posting we will be providing you with some relevant information about a few of these tax credits.

Please note that technical data below has been taken from the Canada Revenue Agency Website at the following link:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/menu-eng.html

 

Pension income amount

You may be able to claim up to $2,000 if you reported eligible pension, superannuation, or annuity payments on line 115, line 116, and/or line 129 of your return.

You may be able to claim up to $2,000 if you reported:

  • eligible annuity and/or pension income on line 115 of your return;
  • eligible pension income on line 116 of your return; or
  • annuity payments on line 129 of your return (box 16 of your T4RSP, Statement of RRSP Income slip), only if you were 65 years of age or older on December 31, 2012, or you received the payments because of the death of your spouse or common-lawpartner.

For a more detailed list of eligible pension and annuity income, see the Eligible Pension and Annuity Income (less than 65 years of age) chart or the Eligible Pension and Annuity Income (65 years of age or older) chart.

Eligible pension income does not include the following income amounts:

  • any foreign source pension income that is tax-free in Canada because of a tax treaty that entitles you to claim a deduction at line 256;
  • income from a United States individual retirement account (IRA); or
  • amounts from a RRIF included on line 115 and transferred to an RRSP, another RRIF or an annuity.

If you and your spouse or common-law partner elected to split pension income, follow the instructions at Step 4 on Form T1032, Joint Election to Split Pension Income, to calculate the amount to enter on line 314 of your and your spouse’s or common-law partner’sSchedule 1, Federal Tax.

Note 
Amounts such as old age security benefits, Canada Pension Plan benefits, Quebec Pension Plan benefits, death benefits, retiring allowances, excess amounts from a RRIF transferred to an RRSP, another RRIF or annuity, amounts shown in boxes 18, 20, 22, 26, 28, and 34 of your T4RSP slips, and amounts distributed from a retirement compensation arrangement shown on your T4A-RCA slips, do not qualify for the pension income amount.

Completing your tax return

To calculate the amount that you are eligible to claim, complete the chart for line 314 on theFederal Worksheet. Enter on line 314 of Schedule 1, Federal Tax, the amount that appears on line A of the Federal Worksheet chart for line 314 or $2,000, whichever is less.

If you and your spouse or common-law partner elected to split pension income, follow the instructions at Step 4 on Form T1032, Joint Election to Split Pension Income, to calculate the pension amount to enter on line 314 of your and your spouse’s or common-law partner’s Schedule 1. Enter the amount on line 314 of Schedule 1 as follows:

  • If you are the pensioner, enter the amount from line H of Form T1032 or $2,000, whichever is less.
  • If you are the pension transferee, enter the amount from line L of Form T1032 or $2,000, whichever is less.

Tax Tip
You may be able to transfer all or part of your pension income amount to your spouse or common-law partner or to claim all or part of his or her pension income amount. Seeline 326 for more information.

Remember to claim the corresponding provincial or territorial non-refundable tax credit to which you are entitled on line 5836 of your provincial or territorial Form 428.

 

 

 

Caregiver amount

You may be able to claim the caregiver amount if, you (either alone or with another person) maintained a dwelling where you and one or more of your or your spouse’s or common-law partner’s dependants lived. Each dependant must have been 18 years of age or older and dependent on you due to an impairment in physical or mental functions. If the dependant is your or your spouse’s or common-law partner’s parent or grandparent, he or she had to have been born in 1947 or earlier.

Completing your tax return

You can claim the caregiver amount for more than one eligible dependant.

You may also be eligible to claim the family caregiver amount.

Complete the appropriate part of Schedule 5, Amounts for Spouse or Common-Law Partner and Dependants, to calculate your claim and give certain details about each of your dependants. Attach a copy of this schedule to your paper return.

Enter, on line 315 of Schedule 1, Federal Tax, the total amount claimed for all your dependants.

Note 
If you did not make this claim in a previous year, but could have, seeHow to change your return.

Claims made by more than one person – If you and another person support the same dependant, you can split the claim for that dependant. However, the total of your claim and the other person’s claim cannot be more than the maximum amount allowed for that dependant.

If anyone (including you) can claim this amount for a dependant, no one can claim an amount on line 306 for that dependant. If anyone other than you claims an amount online 305 for a dependant, you cannot claim an amount on line 315 for that dependant.

 

 

 

Disability amount (for self)

The disability amount is a non-refundable tax credit that a person with a severe and prolonged impairment in physical or mental functions can claim to reduce the amount of income tax he or she has to pay in a year. This amount includes a supplement for persons under 18 years of age at the end of the year. If you are eligible for the disability tax credit (DTC), you may be able to claim the disability amount on your income tax and benefit return. To be eligible for the DTC, we have to approve your Form T2201, Disability Tax Credit Certificate. The original certified form must be submitted in its entirety. We do not accept photocopies or facsimile copies of Form T2201 when completed and signed.

Note
If you receive Canada Pension Plan or Quebec Pension Plan disability benefits, workers’ compensation benefits, or other types of disability or insurance benefits, it does not necessarily mean you are eligible for the DTC. These programs have other purposes and different criteria, such as an individual’s inability to work.

How to apply for the disability tax credit (DTC)?

First, complete Part A of Form T2201, Disability Tax Credit Certificate. Then, take your form to a qualified practitioner who can certify the sections that apply. The following table shows the type of impairment each qualified practitioner can certify:

Qualified practitioner:

can certify:
Medical doctor all impairments
Optometrist vision
Audiologist hearing
Occupational therapist walking, feeding, dressing, and the cumulative effect for these activities
Physiotherapist walking
Psychologist performing the mental functions necessary for everyday life
Speech-language pathologist speaking

When the qualified practitioner has completed and signed Part B of Form T2201, send it to your tax centre.

Avoid delays in the processing of your application

We do not accept photocopies or facsimile copies of Form T2201 when completed and signed. If we receive a photocopy or a facsimile copy, we will return it to the address on file with a request to submit the original version of Form T2201. The original certified form must be submitted in its entirety.

You can send your form to us at any time during the year. By sending us your form before you file your income tax and benefit return, you may prevent a delay in your assessment. We will review your application before we assess your return. Keep a copy of your completed form for your records.

Fees – You are responsible for any fees that the qualified practitioner charges to complete the form or to give us more information. However, you may be able to claim these fees as medical expenses on line 330 or line 331 of your income tax and benefit return.

Can anyone else claim the disability amount for you?

You may be able to transfer all or part of your disability amount (and, if it applies, thesupplement) to your spouse or common-law partner or to another supporting person.

Claim the disability amount by entering it on the applicable line of the income tax and benefit return:

A dependant can be your or your spouse’s or common-law partner’s parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew or niece.

Completing your tax return

If this is a new application for the disability tax credit (DTC), you must submit a completed (including Part A) Form T2201, Disability Tax Credit Certificate, certified by a qualified practitioner or your claim will be delayed. We will review your claim before we assess your return to determine if you are eligible for the DTC.

If you were eligible for the DTC for 2011 and you still meet the eligibility requirements for 2012, you can claim the disability amount without sending us a new Form T2201. However, you must send us one if the previous period of approval ended before 2012, or if we tell you that we need one.

If you were 18 years of age or older at the end of the year, claim $7,546 on line 316. Otherwise, complete the chart for line 316 on the federal worksheet in the forms book.

Supplement for persons under 18

If you are eligible for the DTC and were under 18 years of age at the end of the year, you can claim up to an additional $4,402. However, this supplement may be reduced if, in 2012, someone claimed child care expenses (line 214) or attendant care expenses (as a medical expense on line 330 or line 331) for you. It may also be reduced if you claimed attendant care expenses on line 215 or line 330 for yourself. Complete the chart for line 316 on the federal worksheet to calculate your claim.

Notes
If you received attendant care and you are eligible for the DTC, there are special rules that apply for claiming those expenses. For more information, seeAttendant care or care in an establishment.

If you work, have low income, and high medical expenses that you have claimed at line 215 or line 330, you may be eligible to claim a refundable medical expense supplement on line 452.

If you want to make a claim on line 316, and you have not applied for, or been approved for the DTC yet, you will not be able to use EFILE or NETFILE. You will have to send in your completed Form T2201, Disability Tax Credit Certificate, with your paper return.

If Form T2201 was denied by the Canada Revenue Agency, what can you do?

If we do not approve Form T2201, Disability Tax Credit Certificate, we will send you a notice of determination to explain why the application was denied. Check your copy of the form against the reason given, since we base our decision on the information provided by thequalified practitioner.

If you have additional information from a qualified practitioner that we did not have in our first review of Form T2201, send that information to the Disability Tax Credit Unit of yourtax centre and we will review your file again.

You also have the right to file a formal objection to appeal the decision. The time limit for filing an objection is 90 days after we mail the notice of determination.

Note
Asking us to review your file again does not extend the time limit for filing an objection.

If you choose to file a formal objection, your file will be reviewed by the Appeals Branch. You should send either a completed Form T400A, Objection – Income Tax Act, or a signed letter to:

Chief of Appeals
Sudbury Tax Services Office
1050 Notre Dame Avenue
Sudbury ON  P3A 5C1

You may also file an objection electronically using My Account.

For more information about resolving disputes, see About the Taxpayer Bill of Rights.

Definitions for the disability tax credit

Basic activities of daily living

The basic activities of daily living are:

Blind

See vision.

Certified in writing

Certified in writing means that a qualified practitioner must write a prescription or a note that states the requirement for the patient.

Cumulative effect of significant restrictions (for 2005 and later years)

Cumulative effect of significant restrictions means that:

  • a person is significantly restricted in two or more basic activities of daily living or in vision and one or more of the basic activities of daily living even with appropriate therapy, medication, and devices;
  • these significant restrictions exist together all or substantially all the time (at least 90% of the time); and
  • the cumulative effect of these significant restrictions is equivalent to beingmarkedly restricted in a single basic activity of daily living.

Note
You cannot include the time spent on life-sustaining therapy.

Examples of cumulative effects equivalent to being markedly restricted in a basic activity of daily living:

  • A person can walk for 100 metres, but then must take time to recuperate. He or she can perform mental functions necessary for everyday life, but can concentrate on any topic for only a short period of time.
  • A person always takes a long time for walking, dressing, and feeding.

Dressing

A person is considered markedly restricted in dressing if, all or substantially all the time (at least 90% of the time), he or she is unable or requires an inordinate amount of time to dress himself or herself, even with appropriate therapy, medication, and devices.

Notes
Dressing oneself does not include identifying, finding, shopping for or otherwise procuring clothing.

Devices for dressing include specialized buttonhooks,long-handled shoehorns, grab rails, safety pulls, and other such devices.

Examples of markedly restricted in dressing:

  • The person cannot dress without daily assistance from another person.
  • Due to pain, stiffness, and decreased dexterity, the person requires an inordinate amount of time to dress on a daily basis.

Elimination (bowel or bladder functions)

A person is considered markedly restricted in elimination if, all or substantially all the time (at least 90% of the time), he or she is unable or requires an inordinate amount of time to personally manage bowel or bladder functions, even with appropriate therapy, medication, and devices.

Note
Devices for elimination include catheters, ostomy appliances, and other such devices.

Examples of markedly restricted in elimination:

  • The person needs the assistance of another person to empty and tend to his or her ostomy appliance on a daily basis.
  • The person is incontinent of bladder functions all or substantially all the time (at least 90% of the time), and requires an inordinate amount of time to manage and tend to his or her incontinence pads on a daily basis.

Feeding

A person is considered markedly restricted in feeding if, all or substantially all the time (at least 90% of the time), he or she is unable or requires an inordinate amount of time to feed himself or herself, even with appropriate therapy, medication, and devices.

Notes
Feeding oneself does not include identifying, finding, shopping for or otherwise procuring food.

Feeding oneself does include preparing food, except when the time associated is related to a dietary restriction or regime, even when the restriction or regime is required due to an illness or health condition.

Devices for feeding include modified utensils, and other such devices.

Examples of markedly restricted in feeding:

  • A person requires tube feedings, all or substantially all of the time (at least 90% of the time), for nutritional sustenance.
  • A person requires an inordinate amount of time to prepare meals or to feed himself or herself on a daily basis, due to significant pain and decreased strength and dexterity in the upper limbs.

Hearing

A person is considered markedly restricted in hearing if, all or substantially all the time (at least 90% of the time), he or she is unable or takes an inordinate amount of timeto hear so as to understand another person familiar with the patient, in a quiet setting, even with the use of appropriate devices.

Note
Devices for hearing include hearing aids, cochlear implants, and other such devices.

Examples of markedly restricted in hearing:

  • A person must rely completely on lip reading or sign language, despite using a hearing aid, to understand a spoken conversation all or substantially all of the time (at least 90% of the time).
  • To be understood, it is necessary for the speaker to raise his or her voice and repeat words and sentences several times, and it takes an inordinate amount of time for the person to understand, despite the use of a hearing aid.

Inordinate amount of time

An inordinate amount of time is a clinical judgement made by a qualified practitioner who observes a recognizable difference in the time required for an activity to be performed by a patient. Usually, this equals three times the normal time required to complete the activity.

Life-sustaining therapy

Life-sustaining therapy must meet both of the following conditions:

  • The therapy is required to support a vital function, even if it alleviates the symptoms.
  • The therapy is needed at least 3 times per week, for an average of at least 14 hours a week.

A person must dedicate the time for the therapy – that is, the person has to take time away from normal, everyday activities to receive it. If the person receives therapy by a portable device (such as an insulin pump), or an implanted device (such as a pacemaker), the time the device takes to deliver the therapy does not count towards the 14-hour per week requirement. However, the time he or she spends setting up a portable device does count.

Do not include activities such as following a dietary restriction or regime, exercising, travelling to receive the therapy, attending medical appointments (other than appointments where the therapy is received), shopping for medication, or recuperating after therapy.

For 2005 and later years

  • If the person’s therapy requires a regular dosage of medication that needs to be adjusted daily, the activities directly related to determining and administering the dosage are considered part of the therapy (for example, monitoring blood glucose levels, preparing and administering the insulin, calibrating necessary equipment, or maintaining a log book of blood glucose levels).
  • Activities that are considered to be part of following a dietary regime, such as carbohydrate calculation, as well as activities related to exercise, do not counttoward the 14-hour requirement (even when these activities or regimes are a factor in determining the daily dosage of medication).
  • If a child is unable to perform the activities related to the therapy because of his or her age, the time spent by the child’s primary caregivers performing and supervising these activities can be counted toward the 14-hour per week requirement. For example, in the case of a child with Type 1 diabetes, supervision includes having to wake the child at night to test his or her blood glucose level, checking the child to determine the need for additional blood glucose testing (during or after physical activity), or other supervisory activities that can reasonably be considered necessary to adjust the dosage of insulin (excluding carbohydrate calculation).

Examples of life-sustaining therapy:

  • Chest physiotherapy to facilitate breathing
  • Kidney dialysis to filter blood

Markedly restricted

A person is markedly restricted if, all or substantially all the time (at least 90% of the time), they are unable (or it takes them an inordinate amount of time) to perform one or more of the basic activities of daily living, even with therapy (other than life-sustaining therapy to support a vital function) and the use of appropriate devices and medication.

Mental functions necessary for everyday life

A person is considered markedly restricted in performing the mental functions necessary for everyday life (described below) if, all or substantially all the time (at least 90% of the time), he or she is unable or requires an inordinate amount of time to perform them by himself or herself, even with appropriate therapy, medication, and devices (for example, memory aids and adaptive aids).

Mental functions necessary for everyday life include:

  • adaptive functioning (for example, abilities related to self-care, health and safety, abilities to initiate and respond to social interaction, and common simple transactions);
  • memory (for example, the ability to remember simple instructions, basic personal information such as name and address, or material of importance and interest); and
  • problem-solving, goal-setting, and judgment, taken together (for example, the ability to solve problems, set and keep goals, and make appropriate decisions and judgements).

Note
A restriction in problem-solving, goal-setting, or judgement that markedly restricts adaptive functioning all or substantially all the time (at least 90% of the time) would qualify.

Examples of markedly restricted in mental functions necessary for everyday life:

  • A person is unable to leave the house all or substantially all the time (at least 90% of the time) due to anxiety, despite medication and therapy.
  • A person is independent in some aspects of everyday living. However, despite medication and therapy, he or she needs daily support and supervision due to an inability to accurately interpret his or her environment.
  • A person is incapable of making a common simple transaction, such as a purchase at the grocery store, without assistance all or substantially all the time (at least 90% of the time).
  • A person experiences psychotic episodes several times a year. Given the unpredictability of the psychotic episodes and the other defining symptoms of his or her impairment (for example, lack of initiative or motivation, disorganized behaviour and speech), the person continues to require daily supervision.
  • A person is unable to express needs or anticipate consequences of behaviour when interacting with others.

Prolonged

An impairment is prolonged if it has lasted, or is expected to last for a continuous period of at least 12 months.

Qualified practitioner

The table below lists the qualified practitioners and which type of impairment each can certify.

Qualified practitioner:

can certify:
Medical doctor all impairments
Optometrist vision
Audiologist hearing
Occupational therapist walking, feeding, dressing, and the cumulative effect for these activities
Physiotherapist walking
Psychologist mental functions necessary for everyday life
Speech-language pathologist speaking

Significantly restricted

Significantly restricted means that although the person does not quite meet the criteria for markedly restricted, his or her vision or ability to perform a basic activity of daily living is still substantially restricted all or substantially all of the time (at least 90% of the time).

Speaking

A person is considered markedly restricted in speaking if, all or substantially all the time (at least 90% of the time), he or she is unable or takes an inordinate amount of time to speak so as to be understood by another person familiar with the patient, in a quiet setting, even with appropriate therapy, medication, and devices.

Note
Devices for speaking include tracheoesophageal prostheses, vocal amplification devices, and other such devices.

Examples of markedly restricted in speaking:

  • A person must rely on other means of communication, such as sign language or a symbol board, all or substantially all of the time (at least 90% of the time).
  • A person must be asked to repeat words and sentences several times, and it takes an inordinate amount of time to make himself or herself understood.

Vision

A person is considered blind if, even with the use of corrective lenses or medication:

  • visual acuity in both eyes is 20/200 or (6/60) or less, with the Snellen Chart (or an equivalent); or
  • the greatest diameter of the field of vision in both eyes is 20 degrees or less.

Walking

A person is considered markedly restricted in walking if, all or substantially all the time (at least 90% of the time), he or she is unable or requires an inordinate amount of time to walk even with appropriate therapy, medication, and devices.

Note
Devices for walking include canes, walkers, and other such devices.

Examples of markedly restricted in walking:

  • A person must always rely on a wheelchair outside the home, even for short distances.
  • A person can walk 100 metres (or approximately one city block), but only by taking an inordinate amount of time, stopping because of shortness of breath or because of pain, all or substantially all of the time (at least 90% of the time).
  • A person experiences severe episodes of fatigue, ataxia, lack of coordination, and problems with balance. These episodes cause the person to be incapacitated for several days at a time, in that he or she becomes unable to walk more than a few steps. Between episodes, the person continues to experience the above symptoms, but to a lesser degree. However, these symptoms cause him or her to require an inordinate amount of time to walk all or substantially all of the time (at least 90% of the time).

 

 

 

 

Disability amount transferred from a dependant

You may have a dependant who is able to claim the disability amount (Line 316), and that person may not need to claim all or part of that amount on his or her income tax and benefit return. Under certain conditions, your dependant may be able to transfer this amount to you. If your dependant is eligible for the disability tax credit (DTC), you may be able to claim all or part of his disability amount on your tax return. To be eligible for the DTC, we have to approve Form T2201, Disability Tax Credit Certificate, for your dependant. The original certified form must be submitted in its entirety; we do not accept photocopies or facsimile copies of Form T2201 when completed and signed.

Note
If your dependant receives Canada Pension Plan or Quebec Pension Plan disability benefits, workers’ compensation benefits, or other types of disability or insurance benefits, it does not necessarily mean he or she is eligible for the DTC. These programs have other purposes and different criteria, such as an individual’s inability to work.

Can you claim the disability amount for your dependant?

You may be able to claim all or part of your dependant’s (other than your spouse orcommon-law partner) disability amount (line 316) if he or she was resident in Canada at any time in 2012 and was dependent on you for all or some of the basic necessities of life (food, shelter, or clothing).

In addition, one of the following situations has to apply:

  • You claimed an amount on line 305 for that dependant, or you could have if you did not have a spouse or common-law partner and if the dependant did not have any income.
  • The dependant was your or your spouse’s or common-law partner’s parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew, or niece, and you claimed an amount on line 306 or line 315 for that dependant, or you could have if he or she had no income and had been 18 years of age or older in 2012.

If you have to pay child support, you cannot claim the disability amount transferred from that child. However, if you were separated from your spouse or common-law partner for onlypart of 2012 because of a breakdown in your relationship, you can still claim an amount for that child on line 318 (plus any allowable amounts on lines 305, 306, and 315) as long as you do not claim any support amounts paid to your spouse or common-law partner online 220. You can claim whichever is better for you.

You cannot claim the unused part of this amount if the spouse or common-law partner of the person with a disability is already claiming the disability amount or any othernon-refundable tax credit (other than medical expenses) for the person with the disability.

If you are splitting the unused part of this amount with another person, attach a note to your paper return including the name and social insurance number of the other person who is claiming this amount. The total claimed for that dependant cannot be more than the maximum amount allowed for that dependant.

If you or anyone else paid for attendant care, or for care in an establishment, special rules may apply. For more information, see Attendant care or care in an establishment claimed as Medical Expenses.

You may also be eligible to claim the family caregiver amount.

Completing your tax return

If this is a new application for the disability tax credit (DTC), you must submit a completed (including Part A) Form T2201, Disability Tax Credit Certificate, certified by a qualified practitioner, or your claim will be delayed. We will review your claim before we assess your return to determine if your dependant is eligible for the DTC.

If your dependant was eligible for the DTC for 2011 and still meets the eligibility requirements for 2012, you may be able to claim the disability amount without sending us a newForm T2201. However, you must send us one if the previous period of approval ended before 2012 or if we tell you that we need one. If you are not attaching a Form T2201 for a dependant, attach to your paper return a note stating the dependant’s name, social insurance number, and relationship to you.

If your dependant was under 18 years of age at the end of the year, first complete the chart for line 316 on the federal worksheet in the forms book to calculate the supplement that dependant may be able to claim.

Complete the chart for line 318 on the federal worksheet in the forms book to calculate your claim for each dependant.

Note
If you can claim this amount, you also may be able to claim an amount on line 315for the same dependant.

If you are splitting the unused part of this amount with another person, attach a note to your paper return including the name and social insurance number of the other person who is claiming an amount. The total claimed for that dependant cannot be more than the maximum amount allowed for that dependant.

If you want to make a claim on line 318 and your dependant has not been approved for the DTC yet, you will not be able to use EFILE or NETFILE. You will have to send in the completed Form T2201 with your paper return.

 

 

 

If you would like more information on the above we would gladly be able to assist you with your needs.