Child Tax Credit

CRA Child Disability Benefit (How To)

by bigcajunman on January 21, 2013

As a way of paying it forward for all the help the Blunt Bean Counter (BBC) gave me for setting up my son’s Disability Tax Credit for School Fees, I think the best place to start is a quick How To (or more of a How I, not sure your situation will work exactly like mine) setting up a Child Disability Benefit with the CRA. This is the first important financial thing you must do if you have a disabled child. I will attempt to point to all the relevant parts of the CRA web site, but remember, you can call the CRA (OK February may not be the best time to call, but call anyhow) and ask for clarification or help on how to do this.

First thing is, if you have a child with a disability, you must take advantage of all the help you can from the Government (at all levels) and all the programs you can get. We were quite lucky when our son was diagnosed as being on the Autism Spectrum that the Psychologist at OCTC (Ottawa Children’s Treatment Centre) at CHEO (The Children’s Hospital of Eastern Ontario) filled out all our CRA forms for us (they even provided them). We also were assigned a social worker to speak to us and she had an entire list of things for us to do, now that we had an actual diagnosis about Rhys (our son).

At the time I was having a very hard time coming to grips with the diagnosis, and giving my brain something tangible to do, helped me move forward to help our son. One day Mrs. C8j may write her perspectives on this, but for me just having a list of things to do made it easier to cope (in some ways).

So to sum up, the first thing for this Disability Benefits, you must get a diagnosis from an accredited professional (for that disability).

I will quote the CRA web site on this just for clarity sake:

Not all children with disabilities are eligible for the disability amount. To be eligible a child must have a severe and prolonged impairment in physical or mental functions. An impairment is prolonged if it has lasted, or is expected to last, for a continuous period of at least 12 months

In a great many cases, a child’s disability is obvious, and there should be no issue with getting this disability benefit, however, in the case of the Autism Spectrum and other developmental disabilities, whether you get this benefit relies heavily on the documentation supplied by the diagnosing professional. The CRA can refuse your request for the Child Disability Benefit if your documentation is not to their liking, so make sure the diagnosing professional has filled in the forms before (and knows what needs to be said in the documentation).

Second you need to get the professional to fill in a T2201 Disability Tax Credit Certificate for your child. If your Doctor or other professional says, “I have never done this before” or “I don’t have very good luck with these”, I would strongly suggest you find a Doctor or Hospital that does have experience with this (CHEO in Ottawa, Sick Kids in Toronto, The Children’s Hospital in Montreal as a few examples). These folks know the correct phraseology needed to help you out. Nothing can be more frustrating than not getting benefits you deserve because of the writing shortcomings on a form.

Attempting to claim the Disability Benefit without a T2201 will fail, it must be filled in first! The Psychologist at OCTC knew the correct terms to use for our form, so our claim was accepted, for 10 years, however when Rhys turns 15 we will have to reapply for the Disability Benefit, to remain Disabled (in the eyes of the CRA).

After you have the T2201, you can now start applying for the Child Disability Benefits, by filling out RC66 - Canada Child Benefits Application Form. The form is relatively straight forward to fill in, and wasn’t hard for my wife and myself, but there was an added wrinkle suggested by the OCTC Social Worker.

Since our son was being diagnosed at age 3, we also applied to have the diagnosis and thus the benefit retroactive to my son’s birth. This means we actually applied to get the benefit ongoing, but also for the previous 3 years of my son’s life. OCTC gave us a template letter to fill in asking for this, to be included with the T2201, and RC66 application forms (remember to send ORIGINALS, the CRA will ignore photocopied T2201 forms, as they state on their site, this is important).

The letter we included was quite simple, and if I can find the example, I will make it available on this site, however, it was a simple statement of my son’s birth date, the fact that his diagnosis of Autism is a neurological disorder and that it was present as of birth.

Once you have finally compiled all of this information, you then can mail it into the CRA for their approval. As I stated, there are no guarantees here, but as long as you have followed all of the steps and have a well written set of documents you should be OK (in our case the diagnosis was accepted, but I have heard of other cases where the diagnosis was not accepted).

Hope this helps those parents with disabled kids, if you think there is a mistake here or a step I have missed, please comment (I am not saying this is an exhaustive set of steps, just what we went through with our son).

If your diagnosis is accepted the next step is to start looking for Medical and Disability related Tax implications (to be covered in a later post).

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Here Comes the Summer (Big Spending List)

by bigcajunman on February 24, 2011

Summer of our Discontented Spending

Yes, Mrs. C8j suggested that I do a post about the upcoming summer and ask, “Are you ready for the summer?”, and when I ask it of course is asking, “Have you figured out how not to bankrupt yourself this coming summer?” ( Yes I realize it is supposed to be the Winter of our Discontent, I am taking poetic license)

What could be so expensive for the summer? If you don’t have kids, not as much, but some of this list still might fit into things that you might want to start thinking about now:

How are you going to pay for camp this summer? If your kids are in Daycare then you are already half way there, but what if your kid wants to go to a sleepover camp? We are talking some large amounts of cash, for your kid to have an all expenses paid trip to the woods. I checked and one camp my kids went to, it’s about $700 per week at the camp. Not cheap, is it?
What about around the house? Does your deck look like it’s about to fall over, or you are about to fall through that? How is that going to get paid for? How about the roof? If it’s older than 10 years old, better go check it, because you don’t want to wait too long for that. A roof could cost between $3000 and $12000 depending on your house size and who you hire (and whether you want it to last more than 2 years). Those windows that are allowing snow to blow into rooms might need replacing too.
Hey, don’t just send the kids on vacation, let’s do a family vacation. How much is that all going to cost? Depends, but given that gas is now $1.20 a liter in Ottawa, don’t think driving somewhere is going to be that cheap. I have no guess on this one, any commenters wishing to chime in, feel free.
How about the family car? Does it need new tires? How about a new transmission? Maybe a head gasket job? Maybe it’s time to retire the money pit and get a new one? Yes, that one is not going to be cheap.
Maybe your kids are returning from University, and will descend upon you like a swarm of locusts, treating your house like a bed and breakfast (and complaining there is not enough food in it) (pure conjecture on my part). That is going to start costing you in food, electricity, Internet Fees, water and gas in your car.
Planning on running your Air Conditioning this summer? Can you afford it now, especially in Ontario where rates vary by time of day (so running a power hog like your a/c during the day might be even more expensive than last year).
You will need some more summer clothing for the kids (because most municipalities frown on your kids walking around in the nude), and maybe after packing on 15 pounds this winter, you might need some new clothes too?
You know a good place to get out of the heat in the summer is the mall, whoops, impulse shopping trips sound expen$ive!
You know there is nothing better than a bunch of cold beverages on the deck (hopefully after I fix it), but that stuff isn’t cheap either. Adding more beverages to your grocery bill can kick up your spending a surprising amount.

As you can see by no means is this an exhaustive list of the expenses that may come up this summer, however, if you don’t plan for them now, it could make for a nasty fall (paying off your summer).

Are there any Summer Expenses I have missed? This list is by no means any kind of reflection of where I might be spending money this summer (yeh… right!).

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Pensions and Disabled Children

by bigcajunman on April 13, 2010

From RRSP to RDSP

The government announced a clarification in their last budget outlining how it would be possible for the estate of a deceased parent to be able to transfer the contents of their RRSP to their disabled child’s RDSP, tax free. This strikes me as an eminently sensible idea, because it helps families with disabled children save for the day when Mum and Dad aren’t around any more, and can give the parents a little more peace of mind about the future of their disabled child.

Given this is now the case I then read a very interesting change to the pension system offered to employees at my Alma Mater, the University of Waterloo, which outlines a New cash-out rule in pension plan. What the University was doing was stopping employees from being able to withdraw their funds if they go for early retirement (but in fact it is a severance, not a retirement), they must then leave the funds in the pension plan. Interesting idea, anybody wishing to comment on that please go ahead.

The more interesting point was the exception that they added:

….However, this option will continued to be available after January 1, 2014 to members who retire between ages 55 and 65 and at the time of retirement have a child who is eligible for the impairment credit under the Income Tax Act. …

So if you have a disabled child, and wish to take out the commuted portion of your pension moneys and plan on putting it into a LIRA or RRSP with the idea of then being able to take that money and leave it to your disabled child (tax free), this exception remains.

A very interesting idea, I am open to anyone who wishes to comment yea or nea about this specific idea or about the Government’s changes to the ability of parents to pass money tax free to their disabled children.

I am also curious to see whether this kind of idea for private pension plans may come into play more, or even more interestingly an ability to transfer some portion of a pension from a deceased parent to a disabled child, the same way it is done for the spouse of a deceased Pension member. Don’t think that is likely, but it would be an interesting scenario to see, in my opinion.

A Disabled child Haiku

Much worrying now
Will there be enough for them?
When I am not there?

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More tax reminders

by bigcajunman on February 19, 2009

Since I am doing my taxes here are some other important deductions you should remember (if they apply to you, of course) .

Transit Pass Credit

Remember if you take the bus (or your kids do), you can use the Public Transit Tax Credit . Remember if your kids use a bus pass the following as well:

Yes, you can claim the tax credit for public transit passes on behalf of your spouse, common law partner, and your children under the age of 19, to the extent that these amounts have not already been claimed.

So the expense is transferable as well, useful to know that one.

Education

Having a child in University means I can claim her tuition on my taxes, which is not a bad thing. Since this is the first year for me with this, it is important to get all the forms done right, so please read over the web page and such and make sure the student involved fills in all the forms to allow for the transfer of these credits to you. I am still muddling through this one and will keep you posted on my progress.

The maximum tuition, education, and textbook amount transferred from a child (or fromeach child), is $5,000 minus the amounts that he or she uses, even if there is still an unclaimed part. Tuition, education, and textbook amounts that the student carried forward from a previous year cannot be transferred.

So $5000 max per child is another important point to remember. This is where the High Price of University comes back to help you a little.

Charitable Donations

Now is the time to rummage through your papers to find ALL the receipts that you so carefully stored away when they arrived (yes I am being sarcastic, about myself, I may one day take a picture of my home “work space” to show you just how cluttered and disorganized it is). Each one of these receipts is money back in your pocket, so make sure you find them all.

I have a cross-reference method, since I use Quicken, I check in Quicken for my Charitable expenses and then go and hunt down the receipt (or send the charity a note asking for a duplicate).

Also make sure this is a valid charity, you can go on the CRA site to see which charities have had their Charity designations revoked.

Manual or Computer?

This is an interesting question I ask folks and sometimes get an interesting answer. I have been using various computer software to do my taxes ever since it was possible (I have a Math degree, not an Arithmetic degree), but I do know that Michael James on Money enjoys doing his taxes manually using forms and pencil.

Does anybody else use pencil and paper still? Do you use a service to make up your taxes, and if so why? My taxes this year are going to be confusing, but still not complicated enough that I would pay to have someone else do it, but that may change in the future.

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Taxes Done

by bigcajunman on March 24, 2008

As an update, I submitted my taxes on the 15th and I got my refund on March 20th, so that is quite the speedy response. I did e-file, which I think speeds up the process, but I thought because I had waited a little later I might not get that quick a response, but in fact, I got the expected refund as did my wife and my daughter, so the taxes for last year are now closed.

The major helper for my larger than average refund were:

Mass transit bus pass refund
Donations to my Church
Active Child tax credit

Since those are really my only non-standard tax deductions (oh and my safety deposit box for investing). I should actually adjust my tax deduction schedule so that I don’t get such a large refund (and instead get the money back during the year), but every year things change so I like to carry a certain amount of “cushion” in case I have unexpected income (like my wife working part time or a sudden win-fall from my financial blogging ).

As a point of information I used Quicktax platinum again this year, mostly out of laziness and they had a package where I got a new copy of Quicken a Quicktax Platinum for about $100, which fit my purposes. I am not endorsing or slagging Quicktax, it worked fine for me, but I would guess other programs might have worked fine as well. I have a very “vanilla” tax return these days (don’t think I really needed the Platinum either).

End of Quarter

Yes this week is that last week of this financial quarter, so I will need to put together an updated financial statement for my wife. It is always interesting and useful to do this for me, just to see where I have made progress and areas where I need to keep working hard.

Time to also look at starting a new financial plan, given my Lenten plan didn’t quite work as hoped, but that is why pencils have erasers, mistakes happen. Start a new plan and see if this is the one that maybe gets you back on track.

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