Income Tax Information for caregivers of someone with a disability

How to fill out an Income Tax return if you are a Caregiver of someone with a disability:

First of all, you will need to download form T2201 (Disability Tax Credit Certificate) (web site:  http://www.cra-arc.gc.ca/E/pbg/tf/t2201/

This form has to be filled out by a physician (family doctor, psychologist, psychiatrist) and mailed in with your own Income Tax refund after it is filled out.  Make sure you tell the physician to put the date that your disabled dependant was first diagnosed – Revenue Canada will pay back any time from then (up to a maximum of 4 years I believe – could be more though – maybe even 10).

NOTE:  You may have to pay a small fee to your family doctor, psychologist or psychiatrist to have the Form T2201 filled out.  This fee will be small in comparison to the savings (and money received).

Once you have this form in hand, you are ready to fill out the Income Tax forms.  Follow these simple steps: 

1.         On the Disabled Person’s Income Tax Return;

Fill out Line 145 to 150.  Fill out Line   250 (which should be same amount as Line 145).

On Schedule 1 – Federal:  Claim amounts Line 1 and Line 316 (it says on the form the amount your dependant can claim).

On NB428 (Provincial):  Put amount on Line 5844 (Disability Amount for Self) (it says on the form the amount your dependant can claim). 

Note:  Someone WITH a disability who has income to report and has paid income tax can use this to reduce the Income Tax they paid (they will get a tax return in money - any unused amount not needed to reduce the amount of 'O' could be claimed by the caregiver (or spouse if there is one).

2.         For caregivers:

Fill out Schedule 5 (entitled -Lines 306, 315 and/or 331).  Fill out, ‘Name’, ‘Date of Birth’, ‘Net Income’, and ‘Nature of Impairment’ (just write ‘long-term disability’).  You do not have to put anything in ‘Amount of Claim’ – they (government will figure that out).

On your Schedule 1 – Line  315 (Caregiver Amount) – fill out the Federal Worksheet as instructed (although it does not have to be mailed, I would personally do so if this is the first year you are claiming this amount) – unless the disabled person has worked and made quite a bit of money (not usually the case), you can claim the maximum amount, e.g. this year (for year 2010, it is 4223.00).  On Line 318 (Disability Amount Transferred from a Dependent), again you fill out on Federal Worksheet and you can usually claim the full amount (if same rules applies).  This year, it is 7239.00.

On NB428 (Provincial) – Line 5840 (Caregiver Amount) (fill out the Provincial Worksheet - same rules applies as above) – this year, it is 4145.00, then fill out Line 5848 (Disability Amount Transferred from a Dependant) – this year amount is 7106.00

THAT’S IT.  Make sure you keep copies of everything, especially of the form T2201 (this form does not have to be done every year – I believe it is good for 8-10 years – Revenue Canada will advise you.

It really is easy and simple – once you know how it is done - and that it CAN be done.

Note that whatever date (year) your family doctor or other doctor puts on Form T2201 is how far back they will go in your records and adjust your records (If you ask Revenue Canada to do so).

What I do with the money received for the Caregiver Amount and for the Disability Amount Transferred from a Dependant):  I put it in an RDSP (Registered Disability Savings Plan) and also into a Henson Trust (that will come into effect upon the death of my husband and I).

The web site about the RDSP is:  http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rdsp-reei/menu-eng.html

The web site for the Henson Trust is:  http://www.specialneedsplanning.ca/tools.html

The usual amount of extra refund if you fill out the Caregiver Amount and the Amount Transferred - is usually approximately $2500.00 per year.

Good luck and I hope this was helpful :o)

Also:  I have gotten a question by email - on 'why do people wear masks' - I will answer questions received as promised in an earlier Blog.  I hope to have the answer by Sunday.  So come back if you want my view (which is not necessarily the right one) on this question. :o)