‘Tis the Seasons

With another holiday season gone and the tax season fast approaching, we thought it may be useful to throw a few numbers your way to get you thinking about your tax return. Did you know that a 3.1 million — or 12 per cent of — Canadians suffer from some form infirmity, making them or a loved one potentially eligible for a disability tax credit? You probably already know that families with children who have disabilities are significantly impacted in both income potential and quality of life. But did you know that 100,000 of these 3.1 million Canadians do not claim disability tax credits, when filing their income tax? Their lack of knowledge or understanding of the Canadian disability tax credit translates into thousands of lost dollars. And you probably don’t know that reassessments for disability tax refunds from past years typically average between $10,000 and $20,000. That’s a lot of dough.

Now here’s a few encouraging figures. Did you know that the federal disability tax credit has increased by more $2,000 since 2000? And, did you know that in 2000, Canada Revenue Agency added a disability tax credit supplement for children under 18 — a credit that has since increased by close to $1,000?

Did you know that you or a family member may be eligible to claim a disability, infirmity or caregiver tax credit?

So what should you do?

Talk to an accountant.

Disability tax credits and reassessments aren’t for the faint of heart. Have a qualified accountant thoroughly review your tax situation and explain disability tax credits to you. Together, you may find that you are entitled to claim disability tax credits for tax years past and present. But disability tax credits and readjustments are tricky business. Be prepared to provide copies of tax returns for the past 10 years, visit an appropriate doctor, complete a plethora of forms and carefully review your reassessment. It may feel like you’ve opened Pandora’s Box but it’ll be well worth your time and effort and the money you spend on an accountant. But don’t go it alone. Did I mention you should hire an accountant?

Best wishes for a happy tax season.

This article first appeared in ProConnection, a free monthly e-newsletter and has been abridged and reprinted here with permission by Intuit Canada, makers of QuickTax. Click here for a copy of the full article.

Handprints Winter 2007