Understanding how the disability tax credit and child tax benefit programs work is confusing. It took me years to persuade CRA it was necessary to show the Supplementary Disability Tax Credit for children as an information page.
The Child who qualifies for the Disability Tax Credit may also be entitled to claim a Supplementary credit. What's frustrating is that this supplement isn't shown on the TD1 nor does it show on the tax return, you have to know it's there to be claimed. It does show up on tax return software if you know to check off the right boxes to ensure it appears.
This supplementary tax credit amount on the Disability Tax Credit for a child is required to be reduced by any amounts claimed by anyone for child care or attendant care costs. That's the excuse used as to why it's not included on the TD1.
This supplementary tax credit reduces the total tax payable. If you are entitled to claim the DTC for a child, you are entitled to claim this supplement unless someone who paid for child care or attendant care reduces the claim. To ask your employer to take less tax at source, it would be necessary to complete a T1213 to request that your paycheque be adjusted to reduce your taxes paid during the year by about $800. That's worth doing if you don't have any child care expenses claimed by anyone.
This supplementary tax credit is different from another supplementary disability amount for children. There is also a child tax benefit amount for the child with a disability, which is a cash payment to parents, it's tax free and dependent on income with phasing out at a threshold combined family income of over $157,000.
For 2011, the DTC credit, with the supplement, for families with a low income may qualify for a reduction in taxes of their federal rate of 15% plus their provincial rate (5%) in BC x the tax credit plus the supplement, which equates to $11,623 x 20% = $2324
And the maximum amount added to the Child Tax Benefit for the Disability Child Tax Benefit $2,504
http://www.cra-arc.gc.ca/bnfts/fq_cdb-eng.html#q1
For families, that's almost $5,000 per year. But do families with children know about this? Often they don't find out for as many as ten years or more and the fairness program allows for them to go back to make a claim, but at what cost?
Here's all the indexation amounts for 2012 in case you missed the news flash:
http://www.cra-arc.gc.ca/nwsrm/fctshts/2011/m11/fs111122-eng.html
For families, that's almost $5,000 per year. But do families with children know about this? Often they don't find out for as many as ten years or more and the fairness program allows for them to go back to make a claim, but at what cost?
Here's all the indexation amounts for 2012 in case you missed the news flash:
http://www.cra-arc.gc.ca/nwsrm/fctshts/2011/m11/fs111122-eng.html
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