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Are you missing tax breaks?
By Garry Angus
"People with disabilities may be missing significant tax breaks on their
yearly returns to Canada Revenue," says Doug Lagasse, the TaxAid Western
Canada / Maritimes Client Contact.
His company's TaxAid service (toll free 1-866-829-4446) –
of the firm of Ken Lagasse chartered accounting – provides a free tax
review for people with a disability, their families, or those supporting
them financially. Under the free service, a client's last ten years of
returns can be reviewed, which may reveal significant refunds.
According to Lagasse, one of the most significant issues is "where there
have been misunderstandings over who qualifies for the
credit (DTC)." In 2002 the federal government made "significant
changes," according to Revenue Canada, "to make the eligibility criteria
easier to understand. " But, says Lagasse, "there are still gray areas
"The DTC is not based on the disability one has, but how it affects
you," says Lagasse.
"For example, you do not automatically qualify for a DTC if you have an
artificial limb, but if you cannot walk a short distance - say 150
metres- without moderate to severe pain, or it takes a significantly
longer time to do so than a healthy person of your age, then you will
Under the Income Tax Act, a qualified person from the following list
must certify a person for eligibility for the DTC: medical doctors,
optometrists, audiologists, occupational therapists, psychologists, and
According to Lagasse, " A lot of the doctors and people with
disabilities assume that how the disability affects you must be a lot
more severe than the actual intent or requirements of the tax
As Lagasse explains, physicians may not necessarily be trained in the
area of disability tax legislation, "nor in many cases see it as their
job to know this area."
"So a lot of them think that the severity needs to be a lot more than
not only the intent of the legislation but the precedents being set by
the tax courts in the last five years."
Lagasse says, "It is still subjective, and always leads to gray areas,
and always requires that doctors somehow qualify the patient based on
his/her knowledge of the intent of the tax legislation, and there you
have the difficulty."
The TaxAid service looks at a combination of the legislation and records
from their database of tax court case decisions to help determine who
qualifies for the DTC, he says. "Because we know who qualifies and who
doesn't based on our past history of helping our clients, in a nutshell,
we insure everybody with a disability, their families and caregivers
receive the credits and refunds they are entitled to."
Another feature of the TaxAid service are its free 'Tax Reduction
Clinics' - held at various public locations in the lower mainland since
last year. With over 13 successful clinics held so far, and more B.C.
and Ontario dates just announced for the new year, client feedback for
this service has been quite good, says Lagasse.
"In the Tax Reduction Clinics we cover 7 tax credits or deductions that
are applicable to people with disabilities, a family member or
caregiver," says Lagasse. These seven topics covered are: the disability
tax credit; the caregiver tax credit; infirm dependent tax credit;
childcare expenses; medical expenses; attendant care expenses; eligible
dependent tax credit.
"Eligibility [for a tax credit or deduction] depends on numerous factors
including income levels, severity of infirmity, relationships, timing,
other claims," says Lagasse.
"Many people with disabilities have low incomes and so a large part of
what may be available in the way of tax reductions cannot be utilized by
the person with the disability but can be transferred to a relative or
According to the TaxWise website (www.taxwise.ca/taxaid), irrespective
of a clients income level, the Tax reduction Clinics are intended for:
anyone who has suffered a mental or physical illness or injury that
markedly affects daily living during the last ten years; anyone under
prolonged medical care; those who are providing financial support of any
kind to a person with disabilities or infirmities; or anyone with
significant personal medical expenses.
"After the clinics, we generally offer free tax reviews, and they can be
done over the phone as well," says Lagasse.
In order to cover the costs of providing its free services, TaxWise
charges a "one-time contingency fee, based on successful outcomes, to
those who wish to take the next step and engage our accountants to
prepare and submit their claims to CRA," according to their website.
When asked if he had any parting tips for people with disabilities
seeking to maximize their tax return credits and deductions, Lagasse
said: "Don't assume that you have maxed out your tax refunds in this
[disability tax credit] area. Because of transferability issues,
families should take a close look as well."
"The difficulty is who are you going to find to help you out with that,
because tax professionals in this area are few and far in between. Of
course, they could call us, but I wish there were more people out there
because we can't cover everybody."
The TaxAid toll free number in B.C. is: 1-866-829-4446.