Back to top of page
This site created by
EH? it's simply common sense
Welcome to our website where we try and look at things sensibly, which means we will usually be at odds with the established order. As a result this website is not going to be popular with big government and well paid bureaucrats, the empire builders who live and work in a comfortable cocoon while the most vulnerable members of society struggle to survive. Simple things that may seem insignificant to most people are critically important to the health and well-being of our less fortunate citizens.
Taxes are an inevitable part of life, and the rules that govern taxes at every level contain complexities that, under specific circumstances, result in some level of tax relief. Our purpose is to outline those situations where persons with a temporary or permanent disabling condition can and should take advantage of the tax breaks that are available.
The information provided here may not be fully applicable to your personal situation, it is a general guide that can be used to help you identify tax saving opportunities to discuss with your tax advisor. This information for the 2008 tax year has been confirmed by BDO Dunwoody, Chartered Accountants.
Anyone with a disability can obtain a Disability Tax Credit ($7,021 maximum in 2008) that reduces taxable income. Qualification is quite simple for a person with a disability, obtain form T2201and have it completed by your doctor to certify your health situation, then submit it with your income tax return. Unused credits for a spouse, disabled children, parents or other relatives living with you and dependent on you for support can be transferred to you.
The Disability Tax Credit is non-refundable, which means that if you do not use it to reduce taxable income the refund is lost. There is strong support in the disability community to make this a refundable tax which will then result in a cash refund to disabled people with low incomes. It is therefore important for everyone with a disability to register for the Disability Tax Credit regardless of their current income level.
There are many medical expense deductions that are often missed by persons with disabilities simply because the deductions are not well understood. As a general rule it is better to treat a questionable item as a medical expense rather than decide not to include it because there is a very good chance that it would be allowed. In the event that it is disallowed there is no penalty for trying and the opportunity does exist for contesting the tax department’s decision by filing a Notice of Objection.
It is easier to identify expenses that are not considered eligible medical expenses and treat everything else as eligible. Expenses for health clubs and gyms, non-prescription birth control devices, health food and the portion of expenses that are reimbursed by a medical plan are ineligible.
Medical expenses can be claimed for yourself, your spouse, any children under 18 years of age and for dependent relatives. If you file your return electronically you must retain the receipts, when filing by mail the receipts must be submitted.
The most frequently overlooked deduction concerns transportation for medical services. If you must travel more than 40 km one way to get the services you require you simply keep track of the distance and apply a rate of $.555 per km (2008 Treasury Board rate) for your medical claim.
If you travel over 80 km one way you are also allowed a $17 meal allowance for every meal while away to a maximum of $51 per day, no receipts required. If you need to stay overnight the accommodation cost is also an allowable medical expense but you do need the receipt.
Nursing Home costs are deductible as a medical expense, but a person claiming a nursing home medical deduction cannot qualify for the Disability Tax Credit. Attendant Care can be claimed as a medical expense to a maximum of $10,000 and the Disability Tax Credit still applies.
Another major deduction available to persons with disabilities that is regularly not claimed concerns renovation costs to make your home more accessible in relation to the disability involved. These costs are fully deductible to the extent they improve accessibility and it is very important to keep complete records to support your claim.
The tax department does aggressively monitor these renovation cost claims and you should anticipate that you will be subjected to an audit. Don’t be put off by this, the tax department is just doing their job of making sure everyone pays their fair share of taxes. You have a legitimate claim and, if it is well documented, you will get the deduction. When renovations occur year after year the tax department has a habit of auditing every year, just put up with the nuisance.
This is a very important new program for persons with disabilities who are under 60 years of age. It will be particularly useful for the families of persons with disabilities who want to ensure that their dependent children and siblings will be financially independent as they age.
A RDSP can only be established for a person who has qualified to receive a Disability Tax Credit (DTC), another very important reason to qualify for the DTC now. Contributions to the RDSP are not tax deductible but the income earned is sheltered from tax until withdrawal, in the same way a Registered Educational Savings Plan (RESP) works.
The lifetime maximum contribution is set at $200,000 and the government has two programs that partially match contributions, potentially adding another $90,000 over the life of the fund. All these figures will be indexed for inflation and therefore will increase over time. Income earned on the funds invested is not taxed until withdrawal.
Most banks and financial institutions have already developed RDSP programs, contact your bank for further details.
if you are supporting a dependent adult with a disability you may qualify for a maximum Infirm Dependent Credit of $4,095 if the dependent’s net income is $5,811 or less. Income over $5,811 reduces the maximum credit available dollar for dollar.
If you are the caregiver for a parent or grandparent 65 years of age or older, or an infirm dependent over the age of 18, and they are living with you, you may claim a maximum Caregiver Credit of $4,095 if the dependants income is $13,986 or less. Income over $13,986 reduces the Caregiver Credit dollar for dollar.
Public Transit Passes Tax Credit is a refundable tax credit that should be claimed by everyone using public transit. The program was established to encourage the use of mass transit passes but many municipalities do not provide passes for persons with disabilities, requiring them to use tickets. The cost of these tickets should be claimed under this credit.
For many people with a disability working outside the home even on a part-time basis is not possible, and yet these people have the time and experience needed to make a home business a success. Income net of expenses is taxable, but it is important to ensure that all expenses are considered in determining this net income.
The total expenses of operating your home can be allocated between personal use and business use based on some meaningful indicator such as square footage. If 12% of your house is used for business activities then 12% of all your operating costs such as taxes, mortgage interest, insurance, rent, utilities and maintenance are legitimate expenses.
Use of your personal vehicle for business purposes can also be claimed as a business expense, and it is important that proper records be maintained for business travel. The total number of kilometres travelled can be multiplied by the Treasury Board rate of $.555 for 2008 to compute the allowable vehicle expense claim.
Go back to the MAIN PAGE to learn more about EH?
This site created by
Adding accessible space to an existing home?
We discovered by challenging a revised assessment for realty tax, that the assessment on the renovated portion is exempt from consideration for municipal taxes.
Ex. total value $235,000.00 value of renovations = $65,000.00 = assessment for realty tax of $170,000.00.
Apparently this continues as long as the disabled person the space was created for lives in it.
Comment by accessiblebob - January 31, 2009 @ 3:29 pm
You can also claim your service dog’s expenses as a medical expense. This includes vet bills and dog food. Keep records though.
Comment by Cathy O'Connor - August 6, 2010 @ 2:02 pm