Completing Disability Tax Credit Certificate – Guide for Medical Practitioners
The DTC claim may save your patient or their estate, in case of deceased patients, up to $2,500+/- per year. Additionally, it may qualify them for other tax claims/credits which may substantially increase their tax savings.
Completing this form is relatively straightforward, for a government form. It is primarily ticking the applicable boxes and entering the year the restriction(s) started. There are eight classes of “markedly restrictions” and one for “life-sustaining therapy.” If a restriction does not apply you tick the “Not applicable” box and go on to the next section.
The patient only needs one disability to qualify for the credit if markedly restricted. Markedly restricted means the: individuals’ ability to perform a basic activity of daily living is markedly restricted requiring an inordinate amount of time to perform such an activity, all or substantially all of the time (90%+/-), even with therapy and the use of appropriate devices and medication.
Page 11 is for situations where they have a significant restriction in two or more basic activities of daily living. If, in your professional judgement, the cumulative effect of the significant restrictions is equivalent to being markedly restricted, the patient will qualify.
On page 12 they ask for some addition information describing the effects of the impairment(s) and your diagnosis.
For each restriction they need the year the restriction began. The year may not be the same as the year of diagnosis, as with progressive diseases. The year is important as the DTC may be claimed back for up to ten years. If your records show you first saw the patient in the early part of a year, but because of the nature of the restriction you are satisfied it started in a prior year, you may enter the prior year.
Continuous period of at least 12 months – If the patient has died they may qualify for the exception to this requirement “that an impairment is prolonged when it has lasted, or may reasonably be expected to last, for a continuous period of at least 12 months.” The Canada Revenue Agency’s Income Tax Folio S1-F1-C2: Disability Tax Credit states, in section 2.4: “However, a claim will not be denied solely because the person dies within the 12-month period.”
Patients who would have otherwise qualified, but have died within the 12-month period are approved by CRA.
E.g., Bill, an apparently healthy client, returned from vacation. He wasn’t feeling well and visited his doctor and received a prescription. A week later he went to the emergency and was immediately transferred to the Cancer Clinic where he died three weeks later.
His doctor completed the DTC, as at the time of his death, Bill qualified apart from the 12-month requirement. CRA approved the DTC waiving the normal 12 month period requirement.