The Gateway:  Maximizing the Impact of the Disability Tax Credit

In addition to reducing income tax through a non-refundable credit, the Disability Tax Credit (DTC) serves as a gateway to a wide range of additional tax benefits and government programs. Eligibility for the DTC can unlock enhanced credits, financial supplements, and long-term savings opportunities that go well beyond the tax return. Understanding how the DTC connects to these broader supports is essential for maximizing financial stability—both for individuals living with disabilities and the family members who support them.  Unfortunately, many taxpayers miss this credit and their tax and financial advisors can certainly help when this happens.

Last year, Canadians both prepaid and overpaid their tax and the amount was significant: $148 a month or $1780 for the year, according to taxation statistics to January 4, 2016. That’s money given to the government on an interest-free basis all year long, and bad financial planning. Over a 40-year worklife, your tax overpayment would be worth $71,200 in capital that would not have been invested in the marketplace.

CRA has been prolific recently, releasing its 2015 T1 General Income Tax and Benefits return, its schedules and auxiliary tax forms, together with accompanying guides and pamphlets. To get through them all is a challenge; so is understanding the volume of changes for the 2016 tax year.

CRA is saying “Happy New Year” by launching two new mobile apps: one for individuals and one for businesses. Taxpayers and their advisors may want to check them out. Individual taxpayers can now securely view certain information from their MyAccount data on a mobile app called MyCRA; for example, their notice of assessment, and RRSP and TFSA contribution room are all accessible to them on the go. They can also find out the status of their tax return – just how long that refund is going to take, and information about their social benefits and tax credits.

Last week, KBR took a look at the case of Blue v. the Queen in the Tax Court of Canada, in which the deductibility of support payments was challenged by the CRA. The leading case on the matter of deductible support payments is The Queen v. McKimmon [1990]. The following commentary summarizing the criteria was submitted by Greer Jacks.

Be curious. Enjoy the process. Marvel at life and its richness as you go along. Dr. Susan Biali, M.D.

Learn all the details behind the lines on the 2015 T1 return. But hurry: registration ends Friday January 15.  Designed for the busy tax and financial professional, Knowledge Bureau’s Advanced Tax Workshop is custom-designed to provide the most recent advanced updates from CRA and Finance Canada and to shake out the cobwebs in time for tax season. Ideal for training new and returning staff, too.