Disability tax credit and the RDSP - Do you know them?
I wouldn’t consider myself a disabled person. Even though I’m a bit different from most people, my bag doesn’t stop me from living my life and doing whatever I want.
Nevertheless, having an ostomy has a significant financial impact on our lives. Before my surgery, I was told that an ostomy cost between $1,200 and $1,500 a year. Honestly, I think this amount is underestimated in my case. I have to be very careful and use as few supplies as possible to reach this maximum amount per year. I don’t deprive myself as I have private insurance but it generally costs me between $2,000 and $ 2,500 a year.
Maybe you didn’t know this, but when you fill out your annual tax return you can claim the disability tax credit. To do this, you must download the T2201 form on the Canada Revenue Agency’s website and ask your doctor to complete it in order to be eligible for this credit. This form contains a specific clause concerning elimination that could apply to your situation and that could make you eligible for the disability tax credit. When your form is completed, you have to send a copy of it to the Canada Revenue Agency and another one to Revenu Québec so they can evaluate your file. Being an ostomate doesn’t guarantee your eligibility for the disability tax credit but it doesn’t hurt to try! And if you aren’t granted eligibility, you can still fill out the T400A form (objection) to argue your case.
The disability tax credit is a non-refundable tax credit that can reduce your taxes to pay to the federal and provincial governments. It wouldn’t give you the right to use a parking permit for people with disabilities but it would help you financially!
The disability tax credit is one thing but there is a further more attractive program. Being eligible for the disability tax credit allows you to open a Registered Disability Savings Plan (RDSP) at your financial institution. Having a RDSP is advantageous because the government deposits an amount in it for each amount you deposit in it. The amounts that the Government gives you are based on your annual family income and it can be retroactive for 10 years!
The RDSP can be very valuable for you in the preparation for your retirement. Note that withdrawing money before the age of 60 can cause you to lose the amounts deposited by the Government. However, this plan could help you cover the costs of your supplies during your retirement and the costs of the care you will need later. I know we don’t want to think about it too much but it’s better to take advantage of it than to let these generous subsidies go.
Don’t be ashamed, it's just a way to help us alleviate our financial burden!
Visit the following links to download the T2201 form and to get more information about the disability tax credit:
- T2201 form: https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2201-disability-tax-credit-certificate.html
- Disability tax credit of Canada: https://www.canada.ca/en/revenue-agency/services/tax/individuals/segments/tax-credits-deductions-persons-disabilities/disability-tax-credit.html
- Amount for a severe and prolonged impairment in mental or physical functions of Quebec: http://www.revenuquebec.ca/en/citoyen/credits/defic_grave/default.aspx
Visit the following link to get more information about the Registered Disability Savings Plan (RDSP):
- Registered Disability Savings Plan: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-disability-savings-plan-rdsp.html
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