Many Happy Returns: 3 Tax Tips for Seniors and Disabled Canadians

The April 30 income tax-filing deadline looms on the horizon. For Canadians who haven’t yet begun the unpleasant annual process, Zoomer spoke to Gerry Vittoratos – a Montreal-based expert for the tax preparation software company UFILE – to offer some encouragement and advice to help get them started.

To that end, Vittoratos focussed on three lesser-known tax credits that seniors and disabled Canadians should explore.

 

1. The Disability Tax Credit

Guide dogs, wheelchairs and white canes are visible signs someone is differently abled, but the underutilized federal Disability Tax Credit (DTC) is also available to those with invisible ailments like depression, autism and dementia.

You may be able to claim the DTC amount of $9,428 on line 31600 of your 2023 tax return “if you have a severe and prolonged impairment of a physical or mental function,” says Gerry Vittoratos. Your condition – whether it’s vision loss, Type 1 diabetes or Alzheimer’s disease, to name a few – must cause a “marked restriction” on your everyday activities, which include, for example, walking, hearing, vision or dressing.

So why do so many older Canadians with disabilities pass on this golden opportunity to reduce their tax bill? It’s likely due to the onerous application process. In order to qualify for the Disability Tax Credit certificate, you must fill out a 16-page form that includes a comprehensive report from your doctor (who invariably charges for the service). Then, the Canadian Revenue Agency (CRA) might take up to two months to determine your eligibility. “It can be a hurdle,” concedes Vittoratos.

The beauty of the DTC is that you can claim it retroactively. If the CRA deems you eligible, you can file an adjustment to your past tax returns for as long as you’ve suffered from the disability – up to 10 years back. So, if you’ve had tax owing at any point in the last decade, the government will pay you the DTC refund in one lump sum, which, depending on your tax situation, could be worth as much as $1,500 to $2,500 per year of eligibility. All of a sudden, this overlooked tax credit becomes an unexpected windfall.

For full details of the DTC, visit the CRA.

 

2. The Home Accessibility Tax Credit

Regardless of whether you have a disability or simply want to age in place, you may be planning renovations to make your home more accessible and safe. This could mean anything from installing grab bars, a walk-in bathtub, widening your doorways or adding a wheelchair lift.

Make sure you keep your receipts for building materials, fixtures, equipment rentals, building plans, permits, etc., because, if you have qualified for the Disability Tax Credit or are over the age of 65, you can also claim the Home Accessibility Tax Credit.  This will pay 15 per cent of your renovation costs, up to a $20,000 limit – providing a potential credit of $3,000. Unfortunately, the HATC is a non-refundable credit, so you will only be able to take advantage of it if you have income tax owing.

Vittoratos notes that the hidden beauty of the credit is that you can “double dip” – your renovation expenses may also qualify as a medical expense, and you can claim for both on your tax return. 

For full details of the HATC, visit the CRA.

 

3. The Multigenerational Home Renovation Tax Credit

Vittoratos also noted the Multigenerational Home Renovation Tax Credit, which is a brand new credit for the 2023 tax year.

If you qualify for the Disability Tax Credit (or if you are over 65), this refundable credit can help take the sting out of the costs of adding a unit for a live-in caregiver.

If you are adding a  “secondary unit” to your home, so that a relative or caregiver can move in and provide assistance, you can claim the MHRTC. Vittoratos notes that to qualify for this credit, the secondary dwelling must have a private entrance, a kitchen, a bedroom and a bathroom. 

It’s a valuable credit – you can claim 15 per cent of a maximum of $50,000. So if you’re claiming the full amount of $50,000, your credit would be for $7,500. The best feature is that it’s refundable, meaning that even if you don’t have tax owing, you will still be reimbursed for renovation costs.

Vittoratos advises people to keep their receipts, as the government will likely check on them if you claim. And and notes that you can only claim the credit in the year the work is completed.

For full details on the MHRTC, visit the CRA.

(The information in this article applies to the 2023 tax year. For complete information on each tax credit, visit the CRA)

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