There are many unscrupulous companies in Canada that act like the Disability Tax Credit (DTC), is a huge unknown secret and they can secure you extra money on your taxes if you qualify. In truth they are partially correct – in the way that if you qualify for the DTC you do qualify for additional money when filing a tax return (conditions apply) and that they can secure you money. Here is an even bigger secret – you can actually apply for the DTC yourself and not have to give one of these companies a cut of the money you may be entitled to. Most of these companies actually take a cut of 25 – 35% once you have been approved and Canada Revenue Agency (CRA) refunds your money. When talking to them they actually try to justify their “cut” by saying that they have to collect all of the information. In short, fill out the first page of the Disability Tax Credit application form (T2201) and send the rest of it to your doctor (once you tell them who your doctor is) to fill out the rest and send it back to them (by fax, email, or mail) so that they can submit it to the CRA on your behalf.
I am sure that you may have seen some of the ads on social media websites saying that you may qualify for up to $35 000 or up to $50 000 etc. Please note that this is not necessarily a scam but a lucrative business since the application can be applied up to ten years back. I have seen a few cases where some of my clients have gotten $10 000 to $15 000 refunded but please keep in mind that each case is unique. The point is when using the $10 000 example is why should you pay someone between $2500 and $3500 give or take when you can do it for yourself. It is kind of heartbreaking when many of the people who take advantage of this offer is low income seniors and people who are of lower income in general. While I agree with the fact that people should get paid something for their time – some of the cuts being requested are very high for what is truly being done. It is also a known fact that many more people will qualify for this “credit” as time goes on due to our aging population.
Some people try to justify their own laziness (after they learn about what is involved) by saying to themselves – if I didn’t go to them I wouldn’t be entitled to this money anyways. Stop doing that – stop supporting companies that pray some of the most vulnerable members of our society. If you are one of these people for any reason and you paid in to the system you should apply to get your money back. All of it.
Important Disclaimer: Regardless of whether you apply for it yourself or through one of those third party services the result will, in nearly every case be the same; if you qualify, you qualify, and if you don’t you don’t. These third parties do not work directly for CRA in most cases. As a result, there services offer no additional benefit or credibility aside from the convenience of not having to do it yourself.
Here are the steps to follow to apply for the Disability Tax Credit if you feel that 25 to 35 percent of your own money is too much to give up.
- Get a copy of the Disability Tax Credit Application – this is as simple as going on google and searching T2201 and printing it off.
- Filling out the first page with your personal information and answering the questions. There is even a box that says ”
Yes, I want the CRA to adjust my returns, if possible” – sometimes they will actually refund you previous years without having to do the adjustment. (Section 3) - Take the application to your doctor and have them fill it out. Have them provide as much information as possible, even if it is sending additional reports. A doctor may charge $100.00 for this – it can be claimed as a medical expense.
- Mail it to the address given in the application or have the doctor mail it.
- Wait for a response which can take a few weeks or a few months – if the CRA rejects it you can appeal the decision or they just may want more information.
Chances are that if you read the post to the end and believe that you qualify, you are perfectly capable of applying for the DTC yourself, and dependent on your situation it may very well be worth it.
In my next post about the Disability Tax Credit – I will explain why some people do NOT get money even if they have the claim on file.