Medical Tax Credit for School Costs Template

How do I claim disability tax credit and medical expenses?

Note: The title of this post is a bit ambiguous (and incorrect) in that there is no specific Medical Tax Credit for school or training costs, it is simply being able to claim training and schooling costs as part of the regular Medical Expense Tax Credit (i.e. Medical Tax Credit for School Costs). Can you claim disability tax credit and medical expenses

I didn’t include my letters in  the article yesterday, but I have decided to include it here as an example. I have also put a very disclaimer on this, because I have already had a few folks talk as if I am guaranteeing things will work out if you follow my steps, far from it! I simply am supplying these as examples to help folks out.


Disclaimer: This is an example template of letters that need to be sent to the CRA to receive the METC (Medical Tax Credit for School Costs). I do not imply any guarantees with this letter, nor am I saying this is enough to get the METC, this is simply supplied as a starting point for folks who aren’t sure how to do this. The CRA decides each case individually the clearer your letter is, with as much information as possible should help your request. You should consult your Doctor, and or an Accountant if you are unsure of how to proceed.


Mr. & Mrs Big Cajun Man
Big Cajun Hacienda,
Ottawa, Ontario
H0H 0H0
(613)
555-1212

Big C8j Social Insurance:
Mrs. C8j Social Insurance:

Little C8j Social Insurance:

In Reference to Schooling as a Medical Expense for Little C8j

Our son Little C8j was diagnosed with Autism by Dr. Seuss of The Nice Kids Hospital in Ottawa, and the CRA has accepted this diagnosis as a mental disability (please find attached the supporting CRA documentation).

This letter is to support our request to have his school fees treated as a medical expense. We enrolled Little C8j in the Good School for 2011, instead of our local public school, as we felt the school better addressed his needs as a child on the autism spectrum.

** Here is where you include your reasons why the school serves your child’s specific needs in point form **

Our concerns about Little C8j’s sensory, behavioral and educational needs that we felt could not be addressed in the regular school system:

  • Reason 1
  • Reason 2
  • Reason 3

The Reasons the Good School was our choice for his schooling:

  • Reason 1
  • Reason 2
  • Reason 3

For these reasons we would like to request a reassessment of our 2011 and 2010 income tax returns (specifically for Big Cajun Man) and have the associated School Fees be included as Medical Expenses for these returns.

The Fees Paid for 2010 were: $xxxx.xx

The Fees paid for 2011 were: $xxxx.xx

(see attached receipts)

Best regards,

Big Cajun Man and Mrs. Cajun Man


Example of a possible Doctor’s Supporting Note


Dr. Seuss
His office address

North Pole, ON

H0H 0H0

In Reference to Schooling as a Medical Expense for Little C8j

To Whom it May Concern,

Little C8j was a student at the Good School in 2010, 2011 and 2012 and has been assessed as having Autism and requires more accommodation and support than can be guaranteed and provided in the regular Public Elementary School System.

Little C8j’s psychological assessment indicates his special needs.

Tuition fees paid in 2010 and 2011 to the Good School are eligible under the Medical Expense Tax Credit (METC) of the Income Tax Form according to Section S.118.2 (2) and regulation 5700 in the Income Tax Act.

Dr. Seuss, M.D. 


Hope this helps you get Medical Tax Credit for School Costs.

{ 0 comments }

How To Apply for School Fees for medical credit from CRA

In What are Financial Bloggers Good For, I wrote about the topic: how a parent can claim their child’s school fees as a medical expense. They must qualify under the CRA rules. Mark helped me out with that, and he suggested that I outline the steps that I took to get my child’s school fees for medical credit, from the CRA? Tutoring for your child also can qualify as a medical expense.

As taken from the RC 4064 – Medical and Disability-Related Information 2012 page from the CRA site:

School for persons with an impairment in physical or mental functions – a medical practitioner must certify in writing that the equipment, facilities, or personnel specially provided by that school are required because of the person’s physical or mental impairment.

My Son Many Years Ago (nice rocking plane his sister made)
My Son Many Years Ago (nice rocking plane his sister made)

If you have a disabled child, you may be able to claim their school fees as a medical expense. This is not automatic. You must ask the CRA if you are allowed to claim the school fees for medical credit from the CRA. Remember that the school itself does not necessarily have to be a school for children with disabilities. It must, however, offer a program, staff or equipment for your child’s learning disabilities.

I have not tried, however, this method should work for Tutoring as well. If your child needs specific tutoring because of their disability, try this methodology.

Here are the steps that we took to apply to the CRA . We were granted this tax credit. I have been asked (twice) for proof of fees, so remember to keep your receipts. There are links to the articles I have already written on the topics involved. You can also find them on the RDSP menu item at the top of the web site):

  1. You must apply to get the CRA Child Disabililty Benefit for your child. If the CRA does not agree you may not apply for this credit. In our case we had help from CHEO with all the paper work. (Your child will also need a SIN number to make this application).
  2. We found a school that will work with the specific behavioral issues my son has. This school, knew about the Medical Tax Credit and was willing to help us as well. If you find a specific school for your child’s needs, ask if they have had folks apply for the Medical Tax Credit for Education before. They may be able to help you as well.
  3. We had our Occupational Therapist write a letter about the programs at the school and how they will help my son. Our O.T. went to the school to observe the programs (at each school) before she wrote this letter.  This letter alone is not enough for the CRA. You have more work to do (an O.T. is not a sufficient medical practitioner).
  4. Our Pediatrician wrote a second letter. This letter referred to the letter from the Occupational Therapist and endorsing the school(s) program as being required for my son. This usually costs money to get from your Doctor (in this case my son’s Paediatrician) , however a small price to pay (usually $25). The Blunt Bean Counter helped out a lot here too, he consulted with me, as he had clients who had applied for the tax credit (he gave me a skeleton for the letter to the CRA).
  5. Collect the receipts for the year for your child’s schooling. These are essential for the request.
  6. Include duplicates of the original Disability Grant from the CRA.
  7. A third letter must be written by you (the parents), as a cover letter outlining:
    • Your child’s specifics (when the disability benefit was granted, their Social Insurance Number, Age, etc.,)
    • The letters you have included and why they are included.
    • A request that the medical credit be granted for your child along with the Totals from your receipts
  8. Package this as a Registered letter with all the documents included. Make sure they are signed originals.
  9. You wait. You can check the CRA web site to see what the current status of the request might be.

As with all of the other challenges you have as the parent of a Disabled Child nothing comes easily, but don’t let that deter you.

Follow on: It has been pointed out that your child may not have to be “disabled” (i.e. receive the CRA disability tax credit) to be eligible for claiming school fees for medical credit. You can try to apply for this, even if your child does not receive the disability tax credit. The direct quote I received was:

That is, a child can neither qualify for the DTC nor the CDB and the family can still claim private school tuition as an eligible medical expense.

{ 11 comments }

RDSP Update with TD

As most of you know,  I have my son’s RDSP with TD, and it has been a learning experience for myself and I suspect for TD as well (we were very early adopters of the program), so I have gone back to TD to find out whether they have fine tuned their system to make it easier for parents of children that have disabilities (or loved ones).

I first asked TD via an e-mail, but I received a response which told me they could not reply to my query and that I should call the TD Waterhouse Customer Service line.

As a reminder currently the way I can put money into a TD Waterhouse RDSP (I believe the only RDSP possible with TD, currently) is:

  1. Place money into my TD Waterhouse “Normal” trading account
    • Usually this is done by transferring money from my TD Chequing account to this account, if I do this, it takes a day or two to “clear”
  2. Call the TD Waterhouse folks on the phone, and ask for the money to be transferred to my son’s RDSP account. This normally does not happen instantaneously either, so another short wait.
  3. If I wish to buy ETFs, Index Funds, Bonds, GICs or whatever, I must then call back once the money has cleared, or tell the rep I am talking to when I make the transfer what I want to do with the funds being transferred in.
  4. When the Grant part from the government arrives (usually within a few months), if I wish to use the money to invest, I must then call back and instruct the TD Waterhouse rep what to do with the money.

No, this is not incredibly painful (i.e. I don’t have to go into the branch, I at least can do it in my house), I would prefer if:

  1. I could set up an “auto-saving” vehicle  that purchases an Index Fund (or something similar) every two weeks (when I get paid), thus making saving automatic.
  2. If I could at least transfer and purchase equities on-line without having to talk to the nice folks at TD Waterhouse (i.e. do this all on-line)

Neither of these options are now available.

Last week I called TD Waterhouse Customer Service line and got a hold of a very polite chap called Rob, who listened to my questions, excused himself to go check with his supervisor and returned to tell me that nothing had changed, the system is still not optimum (in my opinion). I thanked Rob as he was sympathetic and very courteous with me (I think I was polite as well, but I can’t say for sure).

So here I sit, in the same place as I was in January, using a technically cumbersome system to try to set up a life savings program for my disabled son. If anyone else from TD wishes to comment or contact me I am available (you guys have already called me at work, so you know who I am).

Other RDSP Posts to Read:

{ 14 comments }

RDSP Update: Nice Payback

My parents gave us some money for him, and we decided the best course was to put the money away in his RDSP (Registered Disability Savings Plan), and we were very pleased with the results.

The Circle of Savings in Canada
The Circle of Savings in Canada

For the RDSP the Government’s kick in was about 2.25 times the money we had put into the account (not 2.25 %, but double plus another quarter of what we had deposited). Thanks to our family income being higher than average we did not get to take advantage of the full bursary which could be:

The Government provides matching grants of up to 300%, depending on the amount contributed and the Beneficiary’s Family Income

This is a limited grant, remember also:

The maximum grant is $3,500 each year, with a limit of $70,000 over your lifetime. Grants are paid into the RDSP until the end of the calendar year in which you turn 49 years old.

If you don’t have enough money remember even if you just put a little money in it you might be able to get a Canada Disability Savings Bond where the government will kick $1000 in a year if you qualify (free money!). Read the RDSP web page to see if you qualify.

Is This Reason Enough?

If there is any question whether this might be a good idea for a parent of a child with a disability, this is the reason. Yes the bursary value is capped, and does have a maximum amount pay out, but if you are not taking advantage of this help from the government you really need to rethink your plans. This is money that will help plan for your disabled child’s future, go do it now!

Addendum

Of course you find out every year how much the government will match in your RDSP Statement of Entitlement, which can guide you how much money to put in for the year.

{ 14 comments }

Tax Tip: Family Caregiver Amount

This year, there is a new Tax Credit for those caring for disabled loved ones, the Family Caregiver Amount. For those of us with disabled children, we need to make sure we claim it.

I spent a lot of Sunday wrestling with what I thought was a “bug” with TurboTax, thinking that it had not given me this credit (which although is a $2000 non-refundable Tax Credit, it becomes a $300 real credit). It turns out that TurboTax’s Forms (not to be confused with the CRA form), wasn’t really showing things correctly.

The Family Caregiver Amount

The Family Caregiver Amount

 

I came to this conclusion after about 2 hours of changing values and not seeing an obvious change, so I decided to walk away from my task (my new methodology so that I don’t obsess over things for a long time (as I normally do) (for those who point out that 2 hours agonizing over a piece of software is a bit obsessive, DUH!)), but first I printed out my return to look it over (later).

After a suitable waiting period (the next day), I looked at the hard copy of my return and sure enough TurboTax had actually claimed the credit however not on line 303, 315 or 305 as I thought it should, it put it on line 367 on Schedule 1 (since the credit is for my son, who is disabled and born after 1995).

Finding this entry allayed my concerns about my return, however, I was a little concerned since TurboTax did not seem to “import from the previous year” that my Son was disabled, and I had to manually go into the TurboTax forms to reset the “Disabled” Flag in the system. If you have a disabled dependent, do a double-check on your return to make sure you have claimed all credits that are available to you.

So my actual purpose of this post was mostly to point out the importance of making sure that you claim the Family Caregiver Amount on your taxes (if you are caring for a disabled loved one).

 

 

{ 2 comments }

%d bloggers like this: