Question regarding DTC


#1

I was very fortunate to have been approved for DTC upon initially being denied. Thank you all for your support.

Question: I am confused about some information regarding this DTC approval. Someone stated that in 2016, individuals with a disability received $8000 but I read that the amount is anywhere from $1500 to $2000 a year. Confused and just wanting to seek clarification. Thank you.


#2

You get a tax credit of aprox 8K but what the tax credit gets you back in taxes is aprox. 1500-2000.
It is a percentage based on your income and how much the credit reduces the amount your income is taxed.

If you do not pay any or little taxes then you can transfer all or a portion of this credit to your spouse or person who helps with your care.


#3

Thank you - That makes sense. When you are on low income every thing helps. I wish I could have got the retro years included but when my former Family Doctor initially responded to the additional questions sent from CRA to clarify my functioning and had me come in to discuss it, I was not well or of a clear head and actually robbed myself of additional money. I was thinking of percentage of the day I walk versus percentage that I am disabled with reduced mobility which would have been 100% of the time. Unfortunately, my Family Physician had to close her practice due to Health issues in her family and my other specialist retired and the other one I terminated, so I have a whole new medical team. My new Doctor was able to respond to 2018 going forward but would not be able to help me with the past issues. I would have had an extra $4800 in my bank which would have really helped me out. Such is my luck and I am glad to be supported with DTC until 2024 when I need to send in an update. I had thought of writing another letter to them explaining what had happened but I doubt that my letter would be considered without medical support. I am glad to the present approval. Thanks again for responding to my question.


#4

Hi Rupert, I’m happy to hear you were approved as it will help a little bit.

The disability tax credit (DTC) is a non-refundable tax credit which means that you, or a supporting person, must have a taxable income in order to benefit from the credit. The DTC is available for people of all ages meeting the DTC definition of disability. The bottom line value of the DTC to you will depend on which province you live in on December 31, your age and a few other complex factors which can’t easily be addressed in a posting. For example, a child eligible for the DTC will be eligible for a higher credit than a person over 18. The “federal” disability amount used in the calculation is the same for all qualified Canadians, but the “provincial” disability amount varies quite a bit as provinces can set their own disability amounts. This is why the range you’ve seen of $1,500 to $2,000 is generally accurate as a bottom line benefit for most eligible DTC claimants.

Note that the DTC is a non-refundable tax credit, and the tax relief/bottom line benefit is the same to all DTC claimaints in your province whether you have a low income or a high income. Other types of “deductions” from income or credits can receive tax relief at your marginal tax rate, which would mean that a high income person, who pays a high tax rate on the last dollar earned, would benefit a lot more than a low income person who pays tax at a lower rate. The DTC works differently and benefits everyone in a taxable income situation the same.

In summary, the bottom line benefit of the DTC to you depends on the province where you reside, not the level of your/your supporting person’s taxable income (assuming, of course, a person’s income is at a taxable level).


#5

Hello, I just sent in my DTC forms a week ago. I was moved from my provincial PWD to CPP-D since I have paid into my CPP a set amount.

Anyways… should I , hypothetically, be expecting a refund from CRA for around $1500 to $2000 per year? Or is that the amount that they deduct from your gross earnings to determine your tax return? I’m really confused. Boy, would a retro payment of a few K really go along way at this moment.

For reference I had income in 2015, severance for half of 2016, Persons with Disability (British Columbia) the remaining 2016 year to Nov 2017 where I was transferred to CCP-D from then to present.


#6

DTC only works if you paid taxes.They will adjust your tax return. If you paid taxes for previous years they will return them back to you up to a certain amount, around $1,500 per year. If you paid no taxes then they won’t return anything.


#7

I think it just a credit to increase the basic exemption amount of taxes owed.
There should be a retroactive lump sum if you get the DTC retroactively for 10 years.
If you’re under 50 and you get the DTC, open an RDSP.