Yesterday I did something I haven’t had to do in close to ten years…I filled out my son’s Disability Tax Credit form. For those who are not in Canada, and those in Canada who just don’t know, the Disability Tax Credit(DTC) is a credit that people with diabetes who are insulin dependent can use on their taxes to reduce their taxable income. People who receive the DTC are also eligible for the Disabled Tax Savings Plan and children who receive the credit may receive a Disabled Child Benefit through the Child Tax Credit.
The DTC, for people with diabetes, is not given because the government views diabetes as a disability. It is given because people who are insulin dependent require insulin to live–they require Life Sustaining Therapy. Life sustaining therapy is a subcategory of the DTC.
Years ago, I embarked on a lengthy journey to see this tax credit be given to people with diabetes. At that time some people got it, some didn’t. It simply seemed to depend on your stamina and the whim of the the CRA agent processing your application. You can read my real time frustrations here but to make a long story short, after a lengthy time frame, the legislation was amended and people with diabetes were given fair and equal treatment under this act.
Children with diabetes who were under 14 (and arbitrary age pulled off of the Internet by CRA officials) were automatically given the credit by virtue of a diagnosis of diabetes. It was assumed that the time the child and parent spent on care would easily total over 14 hours per week (the time required to qualify as needing Life Sustaining Therapy). This was a huge victory and many of my friends’ children were given the tax credit until they were 16 and even 18 years old. No child was being given the credit for life.
Despite the victory for friends, my application was to be reviewed for my son when he turned 15. I knew it was personal. I wasn’t paranoid honest! I would go to events and see the CRA booth set up. As I walked by and they saw my name, they would instantly recognize me. I was sure that having agents of the Canadian Revenue Agency recognize your name was not a good thing. Visions of audits and extended periods of time spent on my returns haunted my nights.
With this in mind, imagine my anxiety at having to complete a new application for my son? I had been advised that my son’s DTC status would change on January 1, 2013 unless my credit was submitted earlier. We have a diabetes clinic appointment next week and the doctor had told me to bring along the form for her to sign. I was still nervous. Would they recognize the name? My last name has changed. I have gone back to my maiden name. Would they still make the connection with my son and his last name? Would I have to fight to prove that yes, we really and honestly do intensively manage his diabetes care. We really do use up well over 14 hours per week in diabetes related junk? I had won this battle once, thousands have since been granted the applications. They couldn’t hold a grudge forever could they?
My mind was cynical but confident. Others get the credit. I help others, including adults, get the credit. My application would not be denied….then I received an email from a friend. “FYI…in case you didn’t know…” and she proceeded to send me a memo that noted CRA has changed its guidelines. All children under the age of 18 who have diabetes and have applied for the DTC will now be approved without further question. Happy dancin!! Happy dancin!!! This was AWESOME!
My DTC application is ready to go. My heart is light and ideally, CRA will process things in a timely manner and my son’s DTC status will not change in January even for a short period of time. Did I mention…HAPPY DANCE!!!!
Its that time of the year again, the time when the tax man comes to call and we scurry to find any way to hang onto our hard earned dollars that we can. This is also the time of year when I find myself inundated with many questions regarding the Disability Tax Credit (DTC).
I am not an accountant. I am not a lawyer. I am a mother who has been dealing with this issue since the beginning of time (or at least early 2000). Back then, the DTC was given to some people with diabetes and denied to others. Eventually it was given to those using insulin pumps but not those on injections. Finally after a long battle, a lot of letters and presentations, this ruling was changed and the discrimination faced by people living with diabetes was removed.
The Disability Tax Credit (DTC) is given to people who are unable to perform the “basic acts of daily living” OR who require life sustaining therapy. While the argument as been made that people with diabetes are not able to perform the basic acts of daily living, the real case has been made that they require life sustaining therapy. If they do not take insulin they die. Its very simple.
So what is the tax credit and why do you want it? Well it gets you money back on your taxes! Again, I am not an accountant but I think of it as my own extra RRSP or spouse to deduct off of my taxable income. If you pay in any income tax, you will see a bit more money coming back to you.
If you have no income or very little income, this credit may still be important for you. It may reduce your income to the point that you now qualify for the GST. If you have a child with diabetes, it will mean that he/she now qualifies for a disabled child benefit which adds approximately another $100 to your monthly CTB.
There are still many questions from people who are not sure if they qualify. I will attempt to answer a few of them to the best of my limited abilities….
1. The Disability Tax Credit? I am not disabled! I don’t want my child labelled this way either. You are not claiming that you or your loved on is “disabled”. By applying for this credit, you are stating that you or your loved one requires “life sustaining therapy” to stay alive. As I have said, no insulin equals no life.
2. Children under 14 who have been diagnosed with type 1 diabetes qualify for the tax credit. It is that simple. The time spent on care by the child and parent is felt to easily total over 14 hours. A signature from your doctor regarding diagnosis will entitle you to the credit. While reducing your taxable income, this credit will also entitle you to the Disable Child Tax Benefit as well as the CTB you may already be receiving.
3. My son is 16. Does he still qualify? Yes, he does. If he has any developmental issues, this definitely means he qualifies and it should be noted on the T2201. If he does not have developmental issues, but he still tests regularly, injects or boluses and intensively manages his diabetes care, then he still requires life sustaining therapy and meets the time requirements.
4. But I have Type 2 diabetes. Do I qualify? This one is a little trickier. If you are no longer producing any insulin and must take insulin injections multiple times per day or use an insulin pump, then you may qualify for the DTC. If your diabetes is still managed through diet, exercise or pills, you will not qualify.
5. I don’t know what type of diabetes I have but I have been using needles for the past 10 years. Again, as long as you are using multiple daily injections, logging, and testing, you most likely will qualify for the DTC.
6. I was told that you can’t count recovery from lows. That is right. You can’t but CRA does recognize that you can make errors in your care. I have a lengthy list of how time is calculated in accordance to CRA guidelines. If you feel that you do these things, then you should easily qualify for the DTC.
Your doctor must be very aware of what qualifies as therapy and how you manage your time. Your doctor now is your key to approval. If he or she understands the time you invest in keeping yourself healthy and tells CRA that, then you will get your tax credit.
7. What is the Disability Tax Credit and why do I care about getting it? Again, it is a credit that gets you money back on your taxes! I am not an accountant but I have come to think of it as my own extra RRSP or spouse to deduct. This is an amount that comes off of your taxable income before anything else. If you pay in any income tax, you will see more money coming back to you.
Even if you have no income or very little income, this credit can still be important for you. It may reduce your income to the point that you now qualify for the GST. If you have a child with diabetes, remember that it will mean that he/she now qualifies for a disabled child benefit which adds approximately another $100 to your monthly CTB.
8. How long does the DTC last? It depends on the person processing your file. Yes, its that arbitrary. I have heard of families with two people diagnosed with Type 1 diabetes who both applied for the DTC
The Disability Tax Credit is a tax credit that you receive because you put so much work into keeping yourself of your loved one alive. Life sustaining therapy is a real part of diabetes. Injecting, bolusing, testing, calculating is all part and parcel of what keeps us or our loved ones alive. These are not tasks that someone without diabetes has to perform.
If you have any further questions ask your diabetes team, your accountant or contact me and I will do what I can to point you in the right direction.