Qualified Disability Trust - significant tax advantages
To schedule an appointment, contact our law firm at 403-400-4092 or Chris@NeufeldLegal.com
The Disability Tax Credit (DTC) is a non-refundable tax credit in Canada for individuals with a severe and prolonged physical or mental impairment. The Disability Tax Credit helps to reduce the amount of income tax a person with a disability, or a supporting family member, may have to pay.
As a non-refundable tax credit, the Disability Tax Credit can reduce the amount of income tax that the taxpayer owes, but the taxpayer won't receive a refund for any unused amount. The goal is to help offset some of the extra costs related to a severe and prolonged impairment. The credit is based on the effects of the impairment, not the diagnosis or a specific medical condition.
To be eligible for the Disability Tax Credit, a medical practitioner must certify that the disabled person's impairment is "severe and prolonged." This means it has lasted or is expected to last for a continuous period of at least 12 months. The disabled person must also have one of the following:
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A "marked restriction" in at least one of the following activities of daily living:
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Walking
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Mental functions necessary for everyday life
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Dressing
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Feeding
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Eliminating (bowel or bladder functions)
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Hearing
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Speaking
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Vision
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Significant limitations in two or more of the above categories, where the combined effects are equivalent to a marked restriction./span>
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AA need for life-sustaining therapy at least twice a week, for an average of at least 14 hours per week.
The Disability Tax Credit can reduce disabled person's (and supporting family member's) income tax, and it also acts as a "gateway" to other federal, provincial, and territorial programs and benefits, such as:
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Registered Disability Savings Plan (RDSP): A long-term savings plan for people with disabilities.
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Canada Disability Benefit (CDB): A new benefit that provides direct financial support to working-aged people with low and modest incomes who have disabilities. You must be approved for the Disability Tax Credit to be eligible for the Canada Disability Benefit.
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Canada Caregiver Credit: A non-refundable tax credit for individuals who support a person with a physical or mental impairment.
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Home Accessibility Tax Credit
If the disabled person does not need the full amount of the tax credit to reduce their own income tax, they may be able to transfer the unused portion to a supporting family member. The disabled person (and/or their supporting family member) may also be able to claim the credit for up to 10 previous years if the disabled person was eligible but did not apply.
We welcome you to shedule an appointment with a href="https://www.calgarywill.ca/special-needs-trust-lawyer-calgary.html">lawyer Christopher Neufeld, such that your estate planning objectives, including the legal and technical demands of your special needs child, are properly accounted for when structuring your inheritance to best protect your children in your absence. Contact our law firm today at 403-400-4092 or via email at Chris@NeufeldLegal.com to schedule a confidential initial consultation.
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