Canada Revenue Agency (CRA)

Updated T2201 (Disability Tax Credit Application form) now has “Diagnosis”

  

If your applications for the disability tax credit has been turned down in the past (for you or a family member) you might want to try to apply again.  The application form, the T2201 which is filled in by your doctor was updated in Jan 2010 to include a section on diagnosis, which was not included in the past versions of this form.

Find the on-line form here:

http://www.cra-arc.gc.ca/E/pbg/tf/t2201/README.html 

Tax Tips for Working Folks

  

Thanks to the Tax Detective, here are some tax tips for the person with a disability who decides to work, even for a low amount of income.  There are incentives to work, some new, some old, in the tax system.  Some government benefit programs are dependent on the calculation of net income and may be affected by increased net income, but there are several claims for expenses that may reduce the calculation of net income.

A program for the working poor, Working Income Tax Benefit will actually pre-pay benefits if you can figure out how to claim.  More information: Line 453 WITB

By claiming medical expenses you may find a supplement you are entitled to, a credit of about $1,000 per year…see Line 452: Refundable Medical Expense Supplement

If you work and pay for Child Care, child care is usually only deductible by the lower income spouse, unless there are extenuating circumstances, such as a parent in school, infirm, jail or hospital. The result of claiming child care is to lower net income.  If the claimant is a person with a disability, reducing their net income will aid in preserving tax credits for a claim by a supporting spouse or other family members and may also reduce the impact on other government benefit programs that rely on the calculation of net income, such as Persons with Disability Benefits, Pharmacare and MSP premiums.

Disability Supports Expense

If a person with a disability works and has certain medical expenses that qualify including attendant care and various devices and equipment, all listed on the T929, they may be claimed on Line 215 to reduce net income.

A benefit of disability supports expense claims is other credits such as the disability tax credit may still transferrable to supportive family because net income is lower than the total of other credits.

The family may also claim other credits such as the caregiver or infirm over 18 tax credits. These credits are all dependent on the calculation of net income, so it makes sense that if the disability supports reduce net income, this is a good thing.

Normally medical expenses don’t reduce net income.  They are reported on Line 330 as a medical expense credit and the taxpayer must deduct 3% of their net income or on Line 331 if paid by the supportive relative net of 3% of the net income of the person with the disability who is supported.

Only the person with the disability can claim Disability Supports on Line 215 and only for the calendar year.  There is no carry over for 24 months in year of death or flexibility of claiming any 12 months that end in the year, or having their spouse claim instead if it’s more advantageous, all of which are possible with medical expenses, both on Line 330 for self, or if paid by someone else on Line 331 net of 3% of the supported persons’ net income.

Eileen Reppenhagen, CGA, ACG, CL

www.taxdetective.ca 

Renovations tax credit doubles up with Medical Expenses Tax Credit in 2009 tax year

  

HRTC deadline January 31, 2010
2009 Budget: It’s possible to double dip into the Home Renovation Tax Credit (HRTC) and Medical Expenses where renovations relate to a lack of normal physical development or severe and prolonged mobility impairment! For details about the HRTC with links to the original budget, and subsequent information pages from various government departments, lists of what’s eligible and what’s not…Surf to HRTC and bookmark it to review next tax season

Home Renovation Tax Credit and Medical Expenses

  

The Tax Detective has a great tax tip on her blog about the Home Renovation Tax Credit and how at the same time you can claim medical expenses on your return. Check it out…

Free Tax Preparation for low-income families

  

Free Tax Preparation for low-income famlies:

The CRA has an on-line list of Volunteer Tax preparation clinics and two local sites are  listed below:

1.  The B.C. ACORN Centre has now opened its free tax preparation service for low-income and working families in Metro Vancouver. To book an appointment for your FREE 2009 tax preparation, call the New West office or visit ACORN’s website.

    Surrey/Vancouver
    36 Begbie St.
    New Westminister, BC V3M 3L9
    Phone: 604-522-8706
    Fax: 604-522-8780
    bcacornva@acorn.org

    http://www.acorn.org

    2.  MOSAIC is offering free tax-preparation every Tuesday and Wednesday at their Burnaby office unitl April 28th.  You MUST make a reservation, call MOSAIC Burnaby at 604.636.4712 and ask for Angel.

    The offices are located at 

    7297 Kingsway
    Burnaby, B.C. V5E 1G5

    Phone:  604.636.4712
    Fax: 604 636 4729

    Directions

     

     

     

     

     

    Tax Problems? Call the New Taxpayer’s Ombudsman

      

    CBC has reported that a new Ombudsman position has been created to deal with complaints about treatment of taxpayers. J. Paul Dube is the new Ombudsman and he is interested in humanizing the Canada Revenue Agency so that the average person has a fighting chance when dealing with tax issues. Visit the website for information about the Taxpayer’s Ombudsman.

    RDSP and Representation Agreements

      

    My 26 year old son has opened up an RDSP with BMO.

    We were told that BMO’s Legal Dept. does not recognize

    Representation Agreements. From  PLAN I understand that

    this is not uncommon. We were able to set it up by going

    into the branch for every step. We found the BMO branch 

    at Brentwood Mall in Burnaby to be very helpful.

    Write off some of your child’s fitness activities expenses

      

    Did you know that you can write off some of your child’s activitiy expenses, even if they are participating in Special Needs activities?

    Following is quoted from : http://www.cra-arc.gc.ca/whtsnw/rgn-eng.html

    "You can claim to a maximum of $500 per child, the fees paid in 2008 that relate to the cost of registering your or your spouse or common-law partner’s child in a prescribed program of physical activity. The child must have been under 16 years of age at the beginning of the year.

    You can claim this amount provided that another person has not already claimed the same fees and that the total claimed is not more than the maximum amount that would be allowed if only one of you were claiming the amount.

    Children with disabilities – If the child qualifies for the disability amount and is under 18 years of age at the beginning of the year, an additional amount of $500 can be claimed provided that a minimum of $100 is paid on registration or membership fees for a prescribed program of physical activity.

    Prescribed program

    To qualify for this amount, a program must:

    • be ongoing (either a minimum of eight weeks duration with a minimum of one session per week or, in the case of children’s camps, five consecutive days);
    • be supervised;
    • be suitable for children; and
    • require significant physical activity (generally, most of the activities must include a significant amount of physical activity that contributes to cardiorespiratory endurance plus muscular strength, muscular endurance, flexibility and/or balance)."

    Check out this website for more information or talk to your tax preparer.

    http://www.cra-arc.gc.ca/whtsnw/chcklst-eng.html