The government of Canada has made some comprehensive options for income tax breaks for families of people with a disability to benefit from tax credits and medical relief especially where the dependant is a child.
One of the tax credit that families fail to take advantage of is the Medical Expense Tax Credit. The METC applies to a whole host of eligible expenses from homecare services not covered by your respite care, to orthopedics. If your medical or dental expenses exceed 3% of your net income you should claim this credit There is no limit to the amount of expenses you can claim for yourself, your spouse and your child with a disability even if they do not live with you. In the 2011 budget the government removed the claim limit for those caring for an aging parent, sibling or a child with a disability. You can claim expenses you paid in any 12 month period ending in 2011 and not claimed in 2010. If you have to travel more than 40 kilometers one way for medical or dental treatment that is not available locally you may claim .48.5 cents per kilometer there and back, plus parking and meals as a medical expense. Payments to a medical doctor, dentist, nurse, certain other medical professionals or a licensed private hospital are eligible. Premiums paid to a private health services plan are eligible. For more information on income tax credits visit the Canada Revenue web site www.cra.gc.ca/Guide RC4064
Families with low and moderate income who have a child with a disability under age 18 may be eligible for the Child Disability Benefit and they may also receive the Canada Child Benefit and the National child benefit supplement. The Registered Disability Income Program (RDSP) which is similar to the Registered Education Savings Plan is a plan that allows parents of a child with a disability to save for their child’s future. For more information on the RDSP visit www.hrsdc.gc.ca/disability_issues
If you were responsible for providing any form of support for you child living with a disability in terms of such common needs like food, clothing and shelter over the period of the preceding year, you can apply for compensation under the terms of the program To benefit, it is necessary to demonstrate that the child was at least for some time living in Canada. The definition of a dependant is decidedly broad and covers such relatives as grandparents, uncles and even nephews and nieces. There is a provision that allows the beneficiary of the compensation to share the benefits with another person, so long as the authorities are informed about this arrangement at the time of application. There are additional details and guideline at www.gc.ca but you will need to search with ‘Guide RC 4064′ to get the full report on what provisions apply to your account.
If at any time during the year your child or relative, over age 18, lived with you, you may be able to claim the Caregiver amount. However if you were required to make support payments for your child you cannot claim the caregiver amount. Conversely if you were separated you can still claim an amount for your child as long as you do not claim any support amounts paid to your spouse or common law partner.
It takes getting the right kind of information in order to benefit from the provisions of income tax breaks for families of people with a disability. The guidelines given here are all you need to know where to apply and how to benefit.
[Extracted from: General income tax and benefit guide 2011]
Want to find out more about a registered disability savings plan (RDSP), then visit John Dowson’s site on how to get guaranteed life insurance for people with a disability.