Disability Supports Deduction

[Togar]

In the section F21500 - Disability supports services, I added an attendant care expense. The taxpayer has earned income. However the deduction did not show up.  I clicked the question mark next to "Device or service of the disability supports expenses, and amount incurred", and a UFile help box popped up. The message includes: "Note that no deduction will be granted if ...you are not claiming the disability amount". 

However, this deduction for attendant care expenses does not require that a disability amount be claimed. CRA Folio S1-F1-C3 Disability Supports Deduction states: "For the fees to be eligible, the taxpayer must be a person who qualifies for the disability tax credit, or a medical practitioner must have certified in writing, that the person is one who, because of that impairment is, and is likely to be indefinitely, dependent on others for their personal needs and care and who as a result requires a full-time attendant."  Note the "or". There are some other expense types as well that do not require eligibility for the disability tax credit.

Why does UFile require that a disability amount be claimed? What if the taxpayer does not have a Disability Tax Certificate and is not entitled to the disability amount?

[Maggie3]

Hello Togar,

As the name of the form T929 Disability Supports Deduction and the federal line number  F21500 - Disability support deduction indicate - you do indeed require approval from the Canada Revenue Agency (CRA) regarding your disability  to claim this amount. 

Please refer to the CRA website below or to the CRA guide.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-21500-disability-supports-deduction.html#lgbl

 

 

[Togar]

Thanks for the reply but I believe you're incorrect.

Nowhere in the link you provided does it say or indicate that you need approval from CRA, or more particularly, that you need a T2201 Tax Disability Certificate.  The link you provided states that for some expenses you need written certification from a medical practitioner that that service or good is needed. A certification from a medical practitioner is NOT the same as a T2201 Tax Disability Certificate. A DTC is required for the disability amount, ie the credit. A certification, not a T2201, is required for the disability supports deduction.

Section 64 of the Income Tax Act addresses the disability supports deduction and states as follows:

"where the taxpayer has an impairment in physical or mental functions, for the cost of attendant care services provided in Canada and to a person who is neither the taxpayer’s spouse or common-law partner nor under 18 years of age, if the taxpayer is a taxpayer in respect of whom an amount may be deducted because of section 118.3, or if the taxpayer has been certified in writing by a medical practitioner to be a person who, because of that impairment is, and is likely to be indefinitely, dependent on others for their personal needs and care and who as a result requires a full-time attendant."

Again, note the "or". Section 118.3 sets out a requirement for a DTC in prescribed form that is subject to approval. The alternative certificate by a medical practitioner does not relate to the disability tax credit, is not in a prescribed form, and does not require approval. It is some document (often a letter) that the taxpayer must possess. The CRA might review a tax return and ask for a copy of the certificate, just like they might ask for a copy of an expense receipt, but that is different than a T2201 which requires approval and is an express requirement to claim the disability tax credit. 

Moreover, certain disability support expenses do not require even a certificate, which is evident from the link you gave.

To claim the disability tax credit, a CRA approved T2201 is expressly required, as is detailed in the Income Tax Act and Guide 4064 - Disability-Related Information. The same Guide also addresses the Disability Supports Deduction, which states that for certain expenses only a prescription is needed, while certain others need a certificate, some need neither. For full time attendant care, ONE of two things is required: a DTC (ie T2201), or a certificate.  For part-time attendant care, a DTC is required.

Even UFile's own Medical Expenses Checklist indicates there is a difference between a certificate and a T2201. To claim Gluten-free food products, written certification is needed, but a T2201 is not needed.

In conclusion, I believe that UFile is wrong to allow the deduction only if a person is claiming (or is able to claim) the disability tax credit.

 

[Maggie3]

Hello Togar,

How to claim the Disability Supports deduction in the program.  To discus the topic, we recommend that  you contact a  professional tax accountant. 

Disability support deduction

If you have impairment in physical or mental functions, you could claim a disability support deduction, if you paid expenses that no one has claimed as medical expenses and that you paid them so you could:

* Be employed or carry on a business;
* Do research or similar work for which you received a grant;
* Attend a designated educational institution or a secondary school where you were enrolled in an educational program.

You cannot claim amounts that were reimbursed by in insurance or another person.

Expenses must be claimed in the year they were paid.

Note that no deduction will be allowed if there is no earned income, and if you do not claim the disability amount.

We suggest that you consult the following links for eligible expenses.

For the CRA:

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-215-disability-supports-deduction.html

https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t929.html

For Revenu Québec:

https://www.revenuquebec.ca/en/citizens/income-tax-return/completing-your-income-tax-return/completing-your-income-tax-return/line-by-line-help/201-to-260-net-income/line-250/point-7/

https://www.revenuquebec.ca/fr/services-en-ligne/formulaires-et-publications/details-courant/tp-358-0-1/

Some products or services must be certified in writing by a physician.

NOTE: We recommend that you keep your receipts to provide them to the CRA or Revenu Québec upon request.

To claim this deduction, please follow the steps below:

1. On the "Left-side menu of the Interview tab", select ''Medical and disability''.

2. Go to the ''Disability deductions, caregiver", on the page appearing on the right, click on the plus sign "+" icon to the right of the line ''Disability supports deduction for attendant care, etc. you needed to be able to earn income (line 21500)".

3. If you have used multiple products or services, click again on the line mentioned in point 2, and another page will appear to allow you to enter all the relevant information.

4. Do not forget to enter the relevant information in the ''Infirmity and disability'' page.

5. If the amount or number of months to consider for the federal government is different from that of Quebec, enter the federal amount and click the icon of the "Maple Leaf " to the right-hand side of the line, to generate a field, in which you enter the amount for Quebec. This box will only appear if you have previously entered the federal amount.

The program will calculate the amount of the deduction and enter it on the federal form T929. This amount will be carried over on line 21500 of the federal return, and an amount for persons with disabilities will also be carried over on line 31600 of federal Step 5.

For Quebec residents, the program will calculate the amount of the deduction and enter it on form TP-358.0.1. This amount will be carried over on line 250 of the Quebec return, and code 07 will appear on line 249. In addition, an amount for severe and prolonged impairment in physical or mental functions will be carried over on line 376 of the Quebec return.