You may be eligible for a tax credit going back 10 years
The recently passed Disability Tax Credit Promoters Restrictions Act has a back story that deserves some publicity.
There’s a line on your tax return, line 316, that allows for a tax credit for those who qualify.
It’s a valuable credit. In the 2013 tax return, the federal and provincial portions of the credit provided a reduction in tax payable of up to $1,545.
In order to take advantage of this tax credit those who qualify need merely complete and submit a disability tax credit certificate form.
The form must be signed by certain health care practitioners such as a physician, optometrist, audiologist, occupational therapist, physiotherapist or psychologist.
Depending on the onset of the disability, the credit may be used in the current year and also retroactively going back up to 10 years. That can result in sizeable retroactive tax refunds.
The opportunity to obtain significant sums of money from the government by simply filing a form naturally led to abuses. Businesses were created to “assist” taxpayers in completing the forms.
Sometimes these businesses would provide health care practitioners to falsely complete the forms, permitting non-qualified taxpayers to wrongly receive tax refunds.
That’s fraud and the Canada Revenue Agency has successfully prosecuted some of these fraudsters.
Some of the businesses conducted themselves within the letter of the law but charged their clients excessive fees, up to 35% of any refund for simply arranging the completion of the form.
People suffering a disability who retained the services of these businesses ended up paying thousands of dollars for a service they didn’t need.
According to the Canada Revenue Agency, the Disability Tax Credit Promoters Restrictions Act has a simple goal and that is to limit the fees that can be charged for assisting in the completion of the disability tax credit certificate form, also called Form T2201.
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