Disability Tax Credit 101
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 Continue reading >>
How To Fight For The Disability Tax Credit With Type 1 Diabetes
Diabetes Canada recently released a statement claiming that the Canadian Revenue Agency (CRA) is now declining 80% of applications for the Disability Tax Credit (DTC) submitted by people living with type 1 diabetes. I cannot confirm or deny these figures. I can state that I am seeing a significant increase in the number of people contacting. They are reaching out because they or their clients have been declined for the DTC. What is going on with the DTC? No one seems to know. CRA claims that there has been no change in policy. Public concern seems to suggest otherwise. For years, people with diabetes have often received a follow-up letter when they have made their application asking for more details from their doctor. In the past, that letter was filled out in a similar manner to the initial application and the claim was approved. This seems to be happening with less frequency now. People living with diabetes are often receiving a letter stating that “an adult who independently manages insulin therapy on a regular basis generally does not meet the 14 hours per week requirement unless there are exceptional circumstances.”. In some cases this is followed by a request for more information but in other cases it is part of the denial for their claim. Does this mean that I should not apply? No. People living with diabetes usually spend over 14 hours per week to intensively manage their diabetes. Granted this does not include all people living with diabetes but does include a large majority. You should continue to send in your detailed applications. Make sure that you are adding tasks that are approved and that your total is over 14 hours. What happens after I apply for the DTC? Once you and your doctor have completed your forms and returned your application, there will be Continue reading >>
Reality Check: Are The Liberals Clawing Back Benefits For People With Diabetes?
A fresh controversy linked to the Liberal government’s approach to taxation erupted on Sunday when a group of health professionals, accompanied by the Conservative finance critic, held a news conference in Ottawa to denounce “thousands of dollars in tax increases” for people with Type 1 diabetes. WATCH: Conservatives say tax credit denial will mean problems for diabetics This complaint is not really new, as interest groups have been trying to flag the problem to the federal government for several months. But with the backing of the official Opposition, it’s now making headlines, becoming the latest in a growing list of tax-related headaches for the Liberals. There has already been some stinging backlash on social media: @liberal_party @JustinTrudeau I'm shocked and angry about the tax credit denial for those impacted by #Diabetes. So wrong. #shameonyou — Christine Cooper (@coopSpeak) October 23, 2017 Here’s a look at what’s at stake, who is losing out and what the government is saying in response. What’s the problem? The complaint coming from groups like Diabetes Canada is simple: Canadians diagnosed with Type 1 diabetes (of which there are an estimated 250,000) used to be approved relatively easily for a tax credit to help with their out-of-pocket medical expenses. That has changed. Managing the autoimmune disease can cost between $5,000 and $15,000 a year. There is no way to prevent or cure Type 1 diabetes. WATCH: A pain-free way for those living with diabetes to measure their blood glucose In order to qualify for the disability tax credit, a medical professional (doctor or nurse) must certify that a patient has a severe and prolonged impairment in physical or mental functions, as defined in the Income Tax Act. The Canada Revenue Agency evaluates each Continue reading >>
Disability Tax Credit And Type 1 Diabetes
UPDATE (Oct 24, 2017): JDRF believes the Canada Revenue Agency (CRA) interpretation of the rules regarding life-sustaining therapy has now changed, resulting in many Canadians with type 1 diabetes being denied the tax relief they're eligible for under the Disability Tax Credit. On October 20, JDRF addressed members of Canada’s Standing Committee on Finance, advocating to make this benefit more widely available to all Canadians living with type 1 diabetes. The CRA has invited JDRF to meet on October 25 to discuss this issue further. Find out more in this press release. --- Are you eligible for the tax breaks? As everyone living with type 1 diabetes (T1D) and their caregivers know, managing the disease can be very costly. The Government of Canada offers some help with this expense, because it officially recognizes T1D as a disability. This allows people living with the disease to apply for a Disability Tax Credit (DTC) and leverage other cost-saving programs. What is the Disability Tax Credit? The DTC is a program designed to help those with disabilities or their caregivers reduce the amount of income tax they pay, offsetting some of the significant medical and treatment expenses. To qualify for the DTC, an individual’s health care provider must submit a T2201 form to the Canada Revenue Agency (CRA), certifying that the disability causes severe and prolonged impairment and describing its impact on their patient’s life. Once approved, the disability amount can be claimed on the individual’s (or their caregiver’s) tax return. “The disability tax credit (DTC) is a nonrefundable tax credit used to reduce the income tax you pay. It's available for people with a severe and prolonged physical or mental impairment, subject to approval by the Canada Revenue Agency (CRA Continue reading >>
'the Cra Lied To Us' About Tax Credit, Say Diabetes Advocacy Groups
Diabetes research and advocacy groups say the Canada Revenue Agency has been lying to them about changes to how it assesses applications for the disability tax credit. In order to qualify for the credit, the CRA requires adults with Type 1 diabetes to spend at least 14 hours a week on activities, specified by the agency, related to administering insulin. A patient's physician must confirm those hours to the CRA. Diabetes Canada and the Juvenile Diabetes Research Foundation obtained an internal CRA memo, dated May 2, 2017, that says: "Unless there are exceptional circumstances, adults with diabetes can generally manage their daily insulin therapy without taking 14 hours per week." Kimberley Hanson of Diabetes Canada says that effectively means most adults with Type 1 diabetes will be denied the disability tax credit, even if they had been approved in previous years. "It put into place a practice whereby no matter what a doctor or a nurse practitioner certifies for their patient, the agent is to disbelieve that and say no," said Hanson at a news conference Monday in Ottawa. Conservatives accuse Liberals of diabetes tax grab Since May, people with Type 1 diabetes have complained that hundreds of them were suddenly being turned down for the tax credit. Hanson said they started asking questions and the CRA denied there were any substantial changes. "I consider that the CRA lied to us in not admitting they sent this email May 2nd and pretending that they were shocked that there had been a change and that it was impacting so many people," she said. No change, minister says National Revenue Minister Diane Lebouthillier has faced questions recently in the House of Commons about the increase in denied applications. At the time, she said there has been no change in the criteria us Continue reading >>
Cra To Review Denied Disability Tax Credit Claims For Diabetics
OTTAWA – The Canada Revenue Agency is taking steps to quell a furor over what critics were calling its heartless treatment of diabetics. Disability advocates and opposition parties have been excoriating the agency for weeks over the fact that many Canadians with Type 1 diabetes have suddenly found themselves ineligible to claim the disability tax credit, even though they’ve previously qualified for it. The CRA insists there’s been no change in the eligibility criteria, which requires an individual to spend at least 14 hours a week engaged in activities related to the administration of insulin. READ MORE: CRA faces fresh criticism on disability tax credit, this time from autism group But diabetes support groups point to an internal CRA clarification letter last May, which said only in “exceptional circumstances” would adult diabetics need 14 hours a week to manage their insulin therapy; most would not – which would mean they’re not eligible for the tax credit. The CRA now says it will revert to the clarification letter that existed prior to May. It will also review all applications for the disability tax credit that have been denied based on the May letter. Revenue Minister Diane Lebouthillier has also reinstated a 14-member disability advisory committee to help the CRA and the minister improve the way they administer tax measures aimed at helping disabled Canadians. READ MORE: Patients, doctors raise concern over disability tax credit rejections On Friday, she released the names of the committee members. Their ranks include representatives of Diabetes Canada and the Council of Canadians with Disabilities. The committee is to be chaired by CRA assistant commissioner Frank Vermaeten and Karen Cohen, chief executive of the Canadian Psychological Association. Continue reading >>
Disability Tax Credit + The Price Of T1d In Canada
WRITTEN BY: Jen Hanson Editor’s Note: this piece was originally published on the Connected In Motion Blog. Update: On December 4, 2017, Diabetes Canada and JDRF reported: “Internal CRA documents show intent to deny the disability tax credit to Canadians with type 1 diabetes.” Read below for ways to raise your voice in opposition. Outside of November (World Diabetes Month), it’s not that often that Type 1 diabetes hits the mainstream media. This past week though, if you’ve been anywhere near the TV news, talk radio, or a Facebook feed, you’ve probably heard that the Canadian Revenue Agency (CRA) has made drastic cuts in approvals of Disability Tax Credit applications for adults living with Type 1 diabetes. This has been done without any substantiated explanation or evidence to support that any Type 1 diabetes therapy requires fewer than 14 hours per week to manage – the standard being used for approval of the credit. The CRA denial documents claim that “the type of therapy indicated [in patient applications do] not meet the 14 hour per week criteria.” This, followed up by a letter from Revenue Minister Diane Lebouthillier outlining that the CRA believes that advances in technology (read: Insulin Pumps) have decreased the time needed by adults to care for for Type 1 diabetes. Perhaps the biggest insult to the Type 1 community is the fact that the CRA has decided that their evaluation of the care needed for Type 1 diabetes supersedes the recommendations of the medical community. Each applicant works with a medical professional to document the minutes and hours required for proper care. An application cannot be submitted without a signature from a medical professional (and, in most cases, follow-up communication with that medical professional to confirm th Continue reading >>
Cpa With Type 1 Diabetes Pleased With Cra Disability Tax Credit Reversal
CPA with Type 1 diabetes pleased with CRA disability tax credit reversal Everett Colby of Colby McGeachy Professional Corporation explains the real cost of diabetes OTTAWA, Jan. 23, 2018 Chartered Professional Accountant Everett Colby, who lives with Type 1 diabetes, is happy with the Canada Revenue Agencys recent decision to return to the pre-May 2017 criteria on disability tax credit (DTC) applications. Kudos to whoever was lobbying on the unfairness of this. Its nice to see that [the CRA] can admit when something just isnt right, he says. Colby is a principal and tax, litigation and forensic accounting partner with Colby McGeachy Professional Corporation of Almonte, Ont. He has qualified for the DTC since 2004, applying on three-year intervals so the CRA can periodically review the restrictive nature of the disease as it affects him. He was previously covered until the end of the 2016 tax year, and recently had it renewed for six years, until 2022. I take insulin at least four times a day. I indicated the time as being 15 minutes per episode of having to take an injection, says Colby, who explains the difficult process involved in not just having to prepare the dosage, along with the swabbing and other tasks, but also the logistical difficulties with having to find some privacy. For example, if he is in a business meeting, that requires leaving the meeting to find a restroom. The same requirement applies to blood glucose monitoring, which also takes 15 minutes per occurrence about four times a day, adding up to another hour, for a total of at least two hours daily. With all of those things combined every day, its not difficult to get over the 14 required hours per week, stresses Colby. There are also significant financial costs involved with managing diabetes. Type Continue reading >>
Disability Tax Credit
What is the Disability Tax Credit? The Disability Tax Credit is a credit offered by Revenue Canada to those of who have a severe mental or physical impairment which markedly restricts the basic activities of daily living and/or need and dedicate time for Life Sustaining Therapy (Therapy that must occur at least 3 times per week for more than 14 hours per week). They further require that the person eligible have an impairment that has lasted or is expected to last for a period of 12 continuous months. Further Revenue Canada notes "For the purposes of the disability amount, Life Sustaining Therapy is any treatment for a disease or a disorder that, if withheld would prevent the functioning on one or a group of vital organs to sustain human life." There are some who do not wish to be labelled as "disabled" or have their child carry such a label. I respect that but for myself and others, any financial relief provided by the Federal government is accepted and desired. Please note...that CRA has reverted to its pre-May 2017 policy regarding people living with diabetes who apply for the Disability Tax Credit. They are also currently reviewing applications that were denied after that date. We would also ask that you continue make your MP aware of this issue. Who Can Apply? The Disability Tax Credit is available to those who have a taxable income and who are markedly restricted in the Basic Acts of Daily Living OR require 14 or more hours per week to administer Life Sustaining Therapy. My child or I have Type 1 Diabetes. Do either of us qualify? Yes! While the qualification criteria for a child under 18 is slightly different from that of an adult, if both of you are intensively managing your diabetes care (you are using MDI or an insulin pump), you most likely will qualify. Child Continue reading >>
Cra Reverses Course On Disability Tax Credit Eligibility For Diabetics
Open this photo in gallery: The Canada Revenue Agency took steps Friday to quell a furor over what critics were calling its heartless treatment of diabetics. Disability advocates and opposition parties have been excoriating the agency for weeks over the fact that hundreds of Canadians with Type 1 diabetes have suddenly found themselves ineligible to claim the disability tax credit, even though they've previously qualified for it. The CRA insisted there's been no change in the eligibility criteria, which requires an individual to spend at least 14 hours a week engaged in activities related to the administration of insulin. But diabetes support groups pointed to a May clarification letter sent by the CRA to doctors who provide the medical information needed to support a claim for the tax credit. That letter said only in "exceptional circumstances" would adult diabetics need 14 hours a week to manage their insulin therapy; most would not – which would mean they're not eligible for the credit. The CRA said Friday that it will revert to the clarification letter that existed prior to May, and review all applications for the disability tax credit that have been denied based on the May letter. Diabetes Canada welcomed the move. Kimberley Hanson, director of federal affairs for the group, said she hopes the review "serves as an opportunity to make the application process clearer for those who need to access this much needed credit and ultimately provides financial relief and fairness for those living with Type 1 diabetes." The advocacy group argues that the disability tax credit is essential to help diabetics pay for medication, medical supplies and devices and that the loss of the credit had caused enormous stress and financial hardship for those affected. Revenue Minister Di Continue reading >>
Canada: Disability Tax Credit
I am getting increasingly frustrated by diabetics complaining about the Liberal government’s recent push to deny diabetics the Disability Tax Credit. Now, don’t get me wrong, I am not a Liberal supporter and this is not intended to be a political post. My frustration is hearing that other diabetics are qualifying for the Disability Tax Credit and I am not. I am a Type 1 diabetic “Accountant”, and I am honest. I had a doctor sign off the T2201 a number of years ago. It lasted for two years when the CRA stepped in and said that I don’t qualify as I don’t meet the 14 hour rule. In all honesty, I have to agree with them. I cannot justify my claim to investing 14 hours a week in life-sustaining therapy per the requirements of the Income Tax Act. Here’s my question. For those of you who are claiming the Disability Tax Credit, how do you justify the 14 hour rule? I get the DTC for severely impaired vision (unrelated to diabetes), so I’ve never taken the time to add up the hours I spend on diabetes-related tasks. However, if I did I suspect I would be close to 14 hours if not over. I don’t think that everyone would necessarily hit this requirement, since even I myself have experiences changes in how difficult my diabetes is to manage over the years. I personally think that if the DTC is available to one person with T1D it should be available to everyone with T1D. For myself, my blood sugar is affected so drastically by so many variables that I have to actively manage it all day every day in order to maintain tight control. I can’t go an hour without checking my CGM or my blood sugar can end up way out of range. There are likely many people out there who do not experience such factors and who may not need to pour so much time into managing their blood sugar. Continue reading >>
Does Diabetes Qualify For Disability Tax Credit?
Todd Korol/National Post Last week’s Family Finance column profiled a young couple, Tim and Kathleen, and mentioned that Tim’s disability and diabetes qualifies him to open a registered disability savings plan. Eligibility to open an RDSP is dependent on qualifying for the disability tax credit (DTC). That diabetes would entitle an individual to claim the DTC surprised some readers, who asked for clarification. Under the Income Tax Act, the DTC is available to people with a “severe and prolonged impairment in physical or mental functions” which markedly restricts one or more of the individual’s basic activities of daily living or would markedly restrict an activity if it wasn’t for “life sustaining therapy.” Life-sustaining therapy is therapy that an individual requires to support a vital function and is administered at least three times per week for an average of at least 14 hours per week. The purpose of this rule is to allow individuals to be eligible for the DTC if they must have life-sustaining therapy that requires them to dedicate a significant amount of time away from their normal, everyday activities to receive the therapy. In 2005, the tax rules were amended to state that if the therapy has been determined to require a regular dosage of medication that needs to be adjusted on a daily basis, the activities directly involved in determining the appropriate dosage are considered part of the therapy. As a result of this change, a child with Type 1 diabetes who is unable to independently adjust his or her insulin dosage may now qualify for the DTC taking account into time spent by his or her parents in assisting the child to administer the insulin. Since the amendment passed, there have been at least two reported cases in which the CRA challenged the Continue reading >>
Internal Cra Documents Show Intent To Deny The Disability Tax Credit To Canadians With Type 1 Diabetes
OTTAWA, Dec. 04, 2017 (GLOBE NEWSWIRE) -- Diabetes Canada and JDRF join today in expressing disappointment after receiving a copy of an internal Canada Revenue Agency (CRA) email demonstrating that a decision was made and communicated internally on May 2nd, 2017 to begin systematically denying type 1 diabetes patients who apply for the Disability Tax Credit (DTC). This confirms that nearly all type 1 diabetes applications are being denied by CRA since May 2nd. In fact a number of Type 1 Diabetes applicants have been denied since May 2 even though they were approved for the DTC in previous years. “We are very concerned about how these changes affect Canadians with type 1 diabetes. It is clear now that a modification was made by the CRA without a formal consultation with patient groups or doctors who have all clearly expressed that it can take 14 hours to manage this disease,” says Kimberley Hanson, Director of Federal Affairs, Diabetes Canada. As Canada’s leading diabetes organizations, JDRF and Diabetes Canada are demanding the Minister immediately rescind the modification made on May 2nd with respect to the procedures CRA employees are expected to follow for DTC applications from Canadians with type 1 diabetes. CRA should have confidence in their own system, which has medical practitioners conducting the initial eligibility screening, and restore the process of accepting certifications from doctors and nurses regarding their patients’ individual circumstances. Type 1 diabetes is a 24-7, chronic, progressive, autoimmune disorder that can neither be avoided nor cured. It renders those living with the disease dependent on insulin injections or infusions for the rest of their life, and puts patients at significant risk of complications such as heart disease, blindn Continue reading >>
Disability Tax Credit - Take Action!
The Disability Tax Credit is an ongoing and important advocacy issue for Diabetes Canada. In the summer of 2017, concerned individuals contacted Diabetes Canada about their DTC claims being denied. Upon further investigation it was discovered that the Canada Revenue Agency (CRA) had begun denying almost every person with type 1 diabetes, whether they were applying for the first time or reapplying for a credit theyd already been receiving for years. Ultimately, we determined that a procedural change implemented by the CRA on May 2, 2017 effectively blocked all adults with type 1 diabetes from accessing the DTC or RDSP. Diabetes Canada immediately began partnering with JDRF, the Canadian Medical Association, Canadian Nurses Association, Canadian Society of Endocrinology and Metabolism and BC Diabetes to push for change . 1. Revert to pre-May interpretations of applications for the DTC from adults with T1D 2. Review all applications denied since May 1, 2017 under pre-May interpretation criteria 3. Re-establish the Disability Advisory Committee to provide a balanced patient perspective and ensure oversight of the CRAs management of the DTC 4. Revise eligibility criteria to explicitly allow carbohydrate counting (currently, this is not allowed) and make the application form clearer for doctors and patients to complete On December 8, the CRA announced that it has implemented Diabetes Canadas requests 1, 2 and 3, and that it will ask the Disability Advisory Committee to study our request number 4. As of early January, Diabetes Canada is aware of 400 Canadians who had been denied the DTC since May and have been approved since December 2017. Also, in early 2018 the Standing Senate Committee on Social Affairs, Science and Technology undertook a study of the DTC and RDSP. Diabete Continue reading >>
Tax Deductions For Diabetes
The IRS allows you to claim a tax deduction for many of the expenses you incur to diagnose, monitor and treat diabetes. If you, your spouse or a dependent suffers from diabetes, it’s likely that you have more medical expenses than the typical person. Fortunately, the IRS allows you to claim a tax deduction for many of the expenses you incur to diagnose, monitor and treat diabetes. However, you must be eligible to itemize to claim the deduction, and even then, only a portion of the expense is deductible. Deductible portion of diabetes expenses Your total deduction for medical expenses, including all costs that relate to diabetes, are only deductible to the extent the total exceeds 7.5 percent of your Adjusted Gross Income (AGI) for 2017 and 2018. Your AGI is not the same as your taxable income; rather it is your total income less specific types of deductions such as student-loan interest and IRA contributions that are separately listed on the first page of your tax return. To illustrate, suppose your AGI is $30,000. Multiplying this by 7.5 percent gives you $2,250. This means that when you total up all of the medical bills you pay during the year, only the portion that is more than $2,250 can be claimed as a deduction. For example, if your total medical expenses for diabetes and other health-related issues cost $3,800, you can claim a $1,550 deduction. Beginning Jan. 1, 2019, all taxpayers may deduct only the amount of the total unreimbursed allowable medical care expenses for the year that exceeds 10% of their adjusted gross income. Diabetes expenses you can include There are a wide range of expenses that you can include in your medical deduction including the purchase price of blood sugar monitoring kits, test strips, insulin and other medications prescribed by your Continue reading >>
