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tax matters

My grandfather had a great sense of humour. "Tim, I sleep like a baby," he would say. "I have no hair, no teeth and I wake up several times in the night."

He had a sense of humour despite his physical ailments – which kept him up too often in the night.

As with my grandmother, I made sure he claimed all the tax relief he could for the disability he had. The tax relief isn't limited to seniors. Anyone with a qualifying disability, or those close to them, may be eligible for tax relief.

Last week I introduced the topic of tax relief for those with disabilities. Today, I want to share some additional ideas on this topic. Specifically, I want to talk about 10 credits and deductions that could provide tax savings.

Disability tax credit

I introduced the disability tax credit (DTC) last week. The DTC can be transferred to a spouse or common-law partner if it's not needed by the disabled person to reduce taxes to zero (subject to some restrictions). Also, the DTC is potentially reduced when you claim attendant care costs greater than $10,000 as a medical expense. As a general rule, where these costs exceed the limit it's better to claim the full costs as a medical expense and forgo the DTC.

Medical expense tax credit

Although I won't get into a long discussion about what qualifies as a medical expense, those who are disabled can claim costs related to care that they require to help them manage day to day. As I said before, claiming certain costs as a medical expense may preclude you from claiming the DTC.

Home accessibility tax credit

This year's federal budget introduced a non-refundable tax credit available starting in 2016 that provides tax relief on up to $10,000 annually of costs incurred to improve accessibility in your home if you're a qualifying individual, which includes disabled folks.

Caregiver amount

Starting in 2014, a new tax credit was introduced. You may be able to claim a maximum amount of $4,608 for 2015 for each dependant (increased to $6,701 in some cases). Each dependant must be 18 years or older and dependent on you due to a mental or physical impairment. If the dependant is a parent or grandparent, he or she had to have been 65 or older.

Children's arts tax credit

You're able to claim a tax credit for up to $500 of costs related to a enrolling a child in a prescribed artistic program. If the child is under 18 and is eligible for the DTC, you can claim an additional $500 if a minimum of $100 is paid for registration or membership fees for an artistic program that qualifies.

Tuition and textbook tax credits

Tax credits for tuition and textbooks differ for those who are in full-time attendance at school versus part-time students. A disabled student is entitled to claim the credits available to full-time students even if they are not attending school full time.

Employer-provided transportation

Most benefits provided by an employer are taxable to an employee. If you're blind or are entitled to the DTC due to a mobility impairment then you won't face tax on transportation that your employer provides for you to attend work. Alternatively, your employer can pay you a reasonable allowance to pay for transportation to get to work and it can be tax-free. A similar tax-free benefit is provided where your employer provides an attendant to assist in the performance of your work.

Child-care expenses

Starting in 2015, you can deduct up to $8,000 for child-care costs for each child under age 7, and $5,000 for each child ages 7 through 16 (and for disabled children older than 16). If your child 16 or younger qualifies for the DTC, the limit is increased to $11,000. It's also the case that your total child-care deductions cannot exceed two-thirds of your salary or business income.

Disability supports deduction

This deduction is for those who pay for assistance in earning employment income or carrying on a business, attending school or carrying on grant-funded research. I won't get into more detail here, but there are 17 potential infirmities and different types of assistance whose costs will qualify for this deduction.

Certain capital costs

Some costs that might otherwise not be deductible because they are capital expenditures can be deducted in full against business income or income from property. These are costs designed to assist those with infirmities (Braille elevator pads are an example).

Tim Cestnick is managing director of Advanced Wealth Planning, Scotiabank Global Wealth Management, and founder of WaterStreet Family Offices.