DTC/RDSP

Did you know that only about 40% of eligible Canadians are using the Disability Tax Credit on their income tax returns?  

The Disability Tax Credit was designed to reduce the amount of income tax that an individual with a disability (or their supporting family member) pays each year, helping cover the extra costs incurred by those with ‘severe or prolonged mental or physical impairments’. By reducing the amount of income tax you may have to pay, the DTC aims to offset some of the extra costs related to your impairment. The DTC not only gives tax savings, but is also the qualifier for many other benefits such as the Canada Workers Benefit Disability Supplement, the Canada Caregiver Credit the Registered Disability Savings Plan  and the newly created Canada Disability Credit.

Qualifying for the DTC isn’t dependent on whether someone can work or go to school, nor their income or assets. However, an individual’s health professional (doctor, OT, psychologist, etc) must say that they have a severe and prolonged impairment, which can be mental or physical, and has lasted or will last at least one year.

The person with the disability or their Caregiver may claim the DTC on their income tax.

To apply for the Disability Tax Credit, you must:

1. Be a Canadian Citizen or Permanent Resident and have a Social Insurance number.
2. Have a mental or physical disability that is severe and prolonged.
3. Fill out the Canada Revenue Agency (CRA) form T2201
4. Submit your Application for DTC

Detailed instructions for completing these steps can be found in the section below.

You can apply for the DTC by paper form or online.

Once you have completed these steps and have been approved to receive the DTC, you can apply for an Registered Disability Savings Plan (RDSP).

You may find this Disability Tax Credit App helpful while applying for the DTC. In order to apply for the Disability Tax Credit, you must:

Be a Canadian Citizen or Permanent Resident and have a Social Insurance number

To apply for the Disability Tax Credit, you must be a Canadian Citizen or Permanent Resident and you must have your Social Insurance Number.

Have a mental or physical disability

You qualify if you have a mental or physical disability that is severe and prolonged (has lasted or is expected by a medical professional to last at least 12 months). You may qualify if you have severe and prolonged impairment in 1 or more of the categories or significant limitations in 2 or more of the categories. The categories include:

• Speaking
• Walking
• Hearing
• Vision (You must be legally blind)
• Dressing
• Elimination (Bladder or bowel function)
• Feeding (Either eating or preparing food)
• Mental Function necessary for everyday life

Fill out Canada Revenue Agency (CRA) form T2201.

The next step in determining your eligibility is filling out Canada Revenue Agency (CRA) form T2201. The T22201 has 2 parts. The form can be found at here on the CRA’s website.

Part A:

This is filled out by the individual with the disability (or a family member or support person).

Part B:

This part is 16 pages and is required to be filled out by a qualified Health Professional. It is important for Health Professionals to understand that they are only required to fill out the sections that apply to their patient. Qualified Health Professionals include:

• Doctors
• Optometrists
• Speech Pathologists
• Audiologists
• Physiotherapists
• Psychologists

When Connecting with Your Qualified Health Professional:

The information that your Health Professional submits on Part B of the T2201 will be used to determine whether you qualify for the DTC. It is imperative that the sections that apply to the person with the disability are filled out completely and accurately.

• It is highly recommended that you request and book a full 30-minute appointment with your Health Professional to ensure there is ample time to have Part B completed fully and with as much detail as possible.
• Entering the date that the disability started on the T2201 is very important. This is not the date that a diagnosis was given, rather the date the symptoms first started.
• It is possible to go back as far as when the disability became noticeable, up to a maximum of 10 years.

Submit your application for DTC

Once your T2201 has been completed (Part A by the person with the disability, and Part B by the Health Professional), it is important to review the form and confirm that all relevant sections have been completed and all pertinent information is included. Do keep a copy for your personal records before sending the application to CRA.

You are now ready to Submit the T2201 to the CRA.  This can be done in 1 of 2 ways:

1. Mail it to: PO Box 14001, Station Main, Winnipeg MB, R3C 3M3.
2. Submit the form online through your CRA MyAccount.

Watch for your ‘Notice of Determination Letter’

Typically, it takes approximately 8 weeks to hear back, unless there is information that is missing on the form. You will be notified if they need more information.

What happens next?

After you have completed the four steps above and have received your Notice of Determination saying you are approved for the DTC, what happens next?

How your DTC will come in use:

• Upon approval from the CRA, you can claim the DTC on your income tax at tax time.
• The Notice of Determination will show which years you are eligible, possibly going back up to 10 years.
• Check your CRA MyAccount to see when or if your DTC Certificate may need to be renewed. In some cases, it will give you a specific year that you will need to re-apply. It may also say “Indefinite” on your Certificate, meaning you do not need to re-apply ever.

Once you have been approved to receive the DTC, you are now ready to apply for a Registered Disability Retirement Plan (RDSP).

Here are a few resources you may find helpful as you prepare to apply for the Disability Tax Credit:

• Helpline Information (Plan Institute)
• DTC GUIDE – OVER 50 (Plan Institute)
• Disability Tax Credit Tool App (Disability Alliance BC)
• T2201 – Disability Tax Credit Application Form (Canada Revenue Agency)

The Registered Disability Savings Plan (RDSP) was created by the federal government as a long-term savings plan that helps people with disabilities and their families in saving for the future. The sooner an individual or a family can begin their RDSP, the more money they will save for the future. Even if you are unable to contribute anything yourself, simply by opening an RDSP account the government may contribute money into the plan to be used by you later in life. An RDSP can be opened up until the year in which you turn 59, and you can receive government contributions until the end of the year you turn 49 (so opening early is key!). Once the individual turns 60, they can start withdrawing money from the RDSP. Income from an RDSP will not affect other disability benefits such as AISH.

To have an RDSP, you must:

1. Be a Canadian Resident
2. Have a Social Insurance Number
3. Have applied for and been approved for the Disability Tax Credit (DTC)
4. Open you RDSP by December 31 of the year they turn 59
5. Parents, legal guardians or adult siblings can set up an RDSP for a minor

You can open an RDSP at the financial institution or bank of your choosing.

Choose a financial institution/representative who knows and understands what a RDSP is. You may choose to work with a Financial Planner or a representative from your own bank.  Contact information for some Alberta banks include:

RBC  (1-888-506-4694)

Representatives at this number can answer any questions regarding the RDSP, as well as book you an appointment at your branch for an in-person meeting to open an RDSP. You may also contact your bank directly to set up an appointment. Staff will also be able to provide information on the Canada Disability Savings Bond and Canada Disability Savings Grant. Visit RBC’s website.

CIBC   (1-800-465-3863)

This is the only phone number at CIBC where they will discuss the RDSP with you.  All applications are completed through this phone number, your branch will not be able to assist in this process. The initial call can take 45-60 minutes as the application is completed over the phone.  CIBC representatives will complete the form, and then mail the completed application form to you for you to review and sign.  You will then mail the forms back to CIBC.  Once they have verified all information is correct and the required signatures are there, they will mail the application form to the government on your behalf. Staff will also be able to provide information on the Canada Disability Savings Bond and Canada Disability Savings Grant. Visit CIBC’s website here.

BMO  (1-800-665-7700)

BMO completes all applications for RDSP over the phone. The initial call will take approximately 45 minutes with a Financial Advisor. BMO representatives will complete the form, and then mail the completed application form to you for you to review and sign.  You will then mail the forms back to BMO. Once they have verified all information is correct and the required signatures are there, they will mail the application form to the government on your behalf. Staff will also be able to provide information on the Canada Disability Savings Bond and Canada Disability Savings Grant. Visit BMO’s website here.

TD/Canada Trust   (1-800-465-5463)

This is a general phone number for TD. To open an RDSP, it must be done in person through your branch.  Contacting your branch directly is the simplest way to have any questions you have answered, as they will connect you with a Financial Advisor that will assist you. Staff will also be able to provide information on the Canada Disability Savings Bond and Canada Disability Savings Grant. Visit TD Canada Trust’s website here.

ATB   (1-855-541-4387)

This number will directly connect you with a Financial Advisor who will complete the application with you over the phone. ATB representatives will complete the form, and then mail the completed application form to you for you to review and sign.  You will then mail the forms back to ATB.  Once they have verified all information is correct and the required signatures are there, they will mail the application form to the government on your behalf. Staff will also be able to provide information on the Canada Disability Savings Bond and Canada Disability Savings Grant.

ATB also offers presentations to anyone interested in gaining further knowledge specific to their personal situation. You can request a presentation at this number. Visit ATB’s website here.

SCOTIABANK   (1-877-929-4499 press 1)

This number will directly connect you to a Financial Advisor who will complete the application with you over the phone. Scotiabank representatives will complete the form, and then mail the completed application form to you for you to review and sign.  You will then mail the forms back to Scotiabank.  Once they have verified all information is correct and the required signatures are there, they will mail the application form to the government on your behalf. Staff will also be able to provide information on the Canada Disability Savings Bond and Canada Disability Savings Grant. Visit Scotiabank’s website here.

SERVUS CREDIT UNION   (1-877-378-8728 Press 4)

You may contact the above number for general inquiries, however, to obtain a RDSP Servus Credit Union requires you to call your branch directly.  There are financial advisors at each branch that will assist you. Visit Servus Credit Union’s website here.)

Once you have received your RDSP, make the most of it. You can apply for the Canada Disability Savings Bond and Canada Disability Savings Grant.

Canada Disability Savings Bond

• Once you have an RDSP, you will apply for the bond through your bank.
• Most importantly, you do NOT have to contribute to the RDSP to receive the bond from the Government.
• The Federal Government will contribute to those who have an RDSP and qualify for the bond according to their income level. The Government will put up to $1000 a year into an RDSP. The maximum lifetime contribution from the Government can add up to $20,000 over a lifetime.
• The Government must receive your bond application by December 31 of the year you turn 49. You are eligible to receive the bond up to and including the year you turn 49.
• For information on eligible income levels visit the Government of Canada RDSP website here. 

Canada Disability Savings Grant

• As long as contributions are made to a RDSP, EVERY Beneficiary can receive the Grant.
• The Grant can be up to 3 times the amount that you contribute, up to $3500 per year if you, your friends or family contribute to your RDSP and up to $70,000 over a lifetime.
• Beneficiaries with lower family income will receive more Grant money than a Beneficiaries with higher family income.
• You are eligible to receive the Grant up to and including the year you turn 49.
• For further information on the Canada Disability Savings Grant, visit the Government of Canada RDSP website here.

• RDSP Step by Step Guide (Plan Institute)
• RDSP Withdrawal Overview (Plan Institute)
• More Resources from Plan Institute
• How to Contact Employment and Social Development Canada
• Questions To Ask a Financial Institution When Choosing Where to Open Up an RDSP
• RDSP Calculator

1. Who can assist you in opening an RDSP?

A Financial Advisor or representative from your bank can.

2. Who is a Beneficiary?

The person with the disability is the Beneficiary of the plan.

3. What are the requirements of the Beneficiary?

The Beneficiary must:

• Be under the age of 60.
• Be a resident of Canada.
• Have a valid SIN.
• Have qualified for the DTC.
• They must have a Plan Holder if they are under the age of majority.

4. Who is a Plan Holder? What can they do and how many can you have?

The person or organization who opens and manages the plan on behalf of the person with a disability. Plan Holders can be a parent, spouse, adult sibling or common-law partner of the Beneficiary, a legally appointed Guardian or Public Department. Beneficiaries under the age of majority must have a Plan Holder.

There can be more than one Plan Holder per RDSP, but only one plan per Beneficiary.

5. What are the requirements of both the Beneficiary and Plan Holder when applying?

Both the Plan Holder and Beneficiary must have a Social Insurance Number (SIN). If a public department is applying on behalf of a Beneficiary, a Business Number is required.

6. What happens when the Beneficiary reaches the age of majority?

Once the beneficiary reaches the age of majority, they can manage their own plan if they are able.

7. What happens if the beneficiary dies?

If the beneficiary dies, the RDSP must be closed and all amounts remaining in the plan must be paid out to the beneficiary’s estate by December 31 of the year following the calendar year in which the beneficiary dies.

8. When can an RDSP be opened?

An RDSP can be opened at any time until December 31 of the year the Beneficiary turns 59.

9. What are the age qualifications for applying for Bonds and Grants?

It’s important to note that if you want to qualify for additional Bonds and Grants from the government, you must apply for the RDSP by December 31 of the year you turn 49.

10. What happens when you take money out of your RDSP?

Earnings grow tax-free until taken out of the RDSP. However, money withdrawn from the RDSP can be used however you want.

11. Is there a contribution limit to an RDSP?

There is no annual contribution limit to an RDSP, however there is a lifetime limit of $200,000.  Grants and Bonds received from the Government do NOT count towards the contribution limit.