Guest Blog: Taxes and Canadian ASD Parents

Important, important note: This post was written in March 2011. Some information may have changed since then and this is an overview that was current in March 2011.

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Dear Diary: Today is the first guest blogger on my blog and it is from @Omum22 over at Twitter (www.twitter.com/OMum22).

Before you read her introduction, I want to tell you she is wickedly funny, clever and studied American history which means I have someone to talk to about Watergate.

Here’s what she writes about herself:

Deanne Shoyer has been a tax consultant since 1990 (obviously a child tax prodigy). She qualified as tax professional in the UK via the Association of Taxation Technicians and the Institute of Taxation. She  relocated from the UK to Toronto in 1996. The tax thing pays the mortgage but she would really like to be a historian when she grows up.  Her greatest accomplishments are her 5 year-old twin boys who are both on the autism spectrum.

Now on to the tax goodies, written by Deanne Shoyer, aka OMum22

“I work in the tax field as a consultant with a background in international tax, so this isn’t my area of specialty. Accordingly, please view this as personal information that I’m sharing with you as a fellow ASD parent, rather than something that’s endorsed by my employer. This summary is NOT exhaustive It highlights information I found beneficial but had to dig around to find. If anyone has questions about their particular circumstances, I’d be happy to provide you with some general guidance.

If you have an ASD child then your starting point in relation to tax issues should be RC4064.  Print it off, read it and keep it handy:

http://www.cra-arc.gc.ca/E/pub/tg/rc4064/

RC4064 is a booklet produced by the Canada Revenue Agency (CRA) that’s a useful summary of the tax information you should be aware of when either yourself or your dependent has a disability. For tax purposes I’m going to refer to ASD as a disability – you may not agree with the applicability of that term to people with ASD but this isn’t philosophy, it’s tax, and I’m trying to provide you with information so that you pay no more than you have to!

  1. Disability Tax Credit (DTC)

http://www.cra-arc.gc.ca/E/pbg/tf/t2201/

Rather than go into the DTC in mind-numbing detail I’ve focused below on a few key issues:

  • Who qualifies? If your ASD child is non-verbal or echolalic, they should have no problem qualifying for the DTC. If your dependent has Aspergers, because communication is typically not affected in the case of Aspies, qualifying for the DTC can be a challenge. In this situation you need to consider:
    • Whether you can argue they are markedly restricted in the “mental functions necessary for everyday life”.
    • If not, is the Aspie significantly restricted in their vision? If yes, then they should qualify for the DTC.
    • If neither of the above applies then the Aspie could still qualify if you can argue that they are significantly restricted in one of the following areas – feeding, hearing, dressing, walking or bowel/bladder function.
    • The terms “markedly restricted” and “significantly restricted” are both defined (see Form T2201).
    • Once certified by a medical practitioner, send the completed form to your tax office. No need to wait until tax time.
    • Don’t be afraid to push back. If CRA responds that the DTC eligibility criteria haven’t been met, you can always ask for that decision to be reviewed. Call the person from the tax office that signed the letter and enquire about how to appeal their decision. In addition, if you’ve been turned down for the DTC once, it doesn’t mean that you can’t reapply if circumstances change.
    • ASD is a lifetime disorder so, regardless of the date of diagnosis, if an individual qualifies for the DTC, they qualify from birth.  If you have only been claiming the DTC from the date of diagnosis, complete the T2201 again and resubmit requesting approval for the claim from the year of birth. You should then amend your tax returns and claim the DTC in those earlier years which should generate a tax refund. CRA are obliged to accept refund claims going back 6 years but as an administrative concession will typically accept refund claims going back 10 years. You amend your return using this form:

http://www.cra-arc.gc.ca/E/pbg/tf/t1-adj/

  • Who claims the DTC? If you are a married couple with an ASD child who qualified for the DTC, the credit can be transferred to either of you. If both of you have sufficient income to pay tax then it likely doesn’t matter which one of you claims the DTC as it’s a credit, not a deduction. In the case of separated/divorced spouses, see page 25 of the RC4064 booklet for guidance regarding which spouse should claim the credit.
  1. Child care expenses
  • The DTC for individuals under the age of 18 is a higher amount, unless their parents are also claiming a deduction for child care expenses relating to that child.
  • If your child qualifies for the DTC then you can claim a deduction for a higher amount of child care expenses – up to $10,000.
  • The spouse with the lower net income claims child care expenses but there are exceptions to this rule.  See Form T778 for further guidance.

http://www.cra-arc.gc.ca/E/pbg/tf/t778/

  1. Children’s fitness amount – you may be able to claim a higher credit for these expenses if your child qualifies for the DTC.
  2. Medical expenses

The RC4064 booklet provides a full listing of qualifying medical expenses that you can claim a credit for.  One expense that I wanted to highlight relates to respite care.  Further detail is provided in the booklet but you should be able to claim a medical expense credit for respite expenses provided you can get a letter from your doctor confirming that:

  • The child has an impairment in physical or mental functions
  • The child needs equipment, facilities or personnel available in the establishment that they attend for respite care
  • The establishment is a special school, institution or ‘other place’

I have the letter I drafted for the boys’ pediatrician so contact me if you would like a copy.

Typically the spouse with the lower net income should claim the medical expenses for the entire family. If both of you have net income exceeding $67,500 then either of you can claim as the tax benefit will be the same.

  1. Child disability benefit

Acronym overload alert:

Once CRA has approved your claim for the DTC then CRA will automatically calculate the Child Disability Benefit (CDB) you are entitled to, but only if you have already completed the paperwork to claim the Canada Child Tax Benefit (CCTB). You would have filled out the forms for the CCTB in order to receive the Universal Child Care Benefit of $100 a month for children under the age of 6. In the case of the Child Disability Benefit, CRA’s systems only calculate 3 years worth of CDB – if you want them to calculate the benefit retroactively for a period that exceeds 3 years then you need to request this in writing. For example, you have a 5 year old who was diagnosed with ASD at the age of 4.  You completed the T2201 indicating that he met the eligibility criteria for the DTC from birth and CRA has approved your application.  Provided you have previously applied for the CCTB then CRA will automatically calculate the CDB you are entitled to receive and pay you a lump sum catch-up payment for the last 3 years.  In order to obtain the CDB you were entitled to for the first two years of your child’s life, you will need to send your tax office a written request asking them to calculate your entitlement to the benefit for that period.”

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10 thoughts on “Guest Blog: Taxes and Canadian ASD Parents

  1. Pingback: Twitter, A Great Dating Site « Gingerheaddad

  2. Thank you for every other great

    post. Where else could anyone get that type of info

    in such an ideal approach of writing? I’ve a presentation next

    week, and I am on the search for such information.

    Like

  3. Pingback: Financial supports for disabled people in Canada and their families | Small But Kinda MightySmall But Kinda Mighty

  4. hello,
    thanks for the great info and link to resources 😀
    2 questions though,
    a) which parent claims the CDB? because of our sons condition and my husband in the military, I can not find work that can accept the demands of my child’s needs. Last year we were unable to claim childcare or preschool expenses as I have no income other than the UCCB. does it have to be the lowest income earner, meaning we get nothing?
    b) we didn’t claim the caregiver amount as we thought we thought we needed a full diagnosis (not provisional as we have now). he will be getting his full diagnosis in September. which parent is eligible to claim that amount? and can we amend last years filing to receive it for 2013?

    Thanks so much in advance for any information that you may be able to provide.

    Like

    • Hi Rebecca, Jim asked me to respond to your questions.

      1) CDB is paid with the Canada Child Tax Benefit which typically is paid out to the mother. In terms of assessing whether you receive the CDB and if yes, how much, CRA will calculate your entitlement based on your *family’s* net income which includes your husband’s.

      2) When you have your son’s diagnosis then get the Form T2201 completed (which entitles you to the Disability Tax Credit). Ensure that the form states correctly when your child’s disability started – I’ll assume for the purpose of answering your question that this was at birth and that your son was born before 2013. You can use the T2201 to substantiate your claim to the Family Caregiver Amount so once you have it, yes, I would go back and amend the 2013 tax return and claim the FCA. In terms of who claims the credit it sounds like your husband has the higher income so I would claim it on his return. There doesn’t seem to be any requirement that it has to be claimed by the lower income spouse, so given that you’re not separated, either of you should be able to claim the credit.

      I have answered your questions based on the information available on CRA’s website.

      Like

    • Thank you! It is by far the most read post on my blog and the information is a useful starting point.

      Being diagnosed at 8 must have been tough for you and your son. I hope you are getting all the supports you need.

      Like

  5. My pediatrician diagnosed my daughter who is now 8 with Autism and ADD…when I asked him to fill out the t2201 acted like such a jerk. He did fill out the forms but put the date as 2014 when he began seeing her…not her birth year of 2008! Im very upset about that but I wrote a letter to the CRA explaining that is why the pediatrician put the date as 2014 and that we were without a family doctor before then….do you think the CRA will just back daye it to birth automatically? ?

    Like

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