When to renew your Disability Tax Credit
If you have restrictions that severely impact your daily life, you may qualify for the Disability Tax Credit (DTC), a non-refundable tax credit that helps to reduce taxes that you or your caregiver owes. You can read more about it and how to apply in our Helpsheet here.
Once you submit your application, the CRA will determine whether you’re eligible and and how long your eligibility will last. Some people are indefinitely approved for the DTC; this means you will never have to apply again, unless the CRA asks you to!
However, we find that it’s more common for the CRA to approve applicants for a certain number of years. DTC eligibility can be as little as 1 year, or be in other increments like 3, 5, 10, and so on. If your disability isn’t permanent, this can be helpful. However, this can also be true if your disability is permanent.
So, what happens when someone is still experiencing restrictions after their DTC eligibility expires?
When reapplying for the DTC, you will have to reapply with a new application. Unfortunately, you won’t be able to use any documents submitted in previous applications. You will have to restart the process again. You can read more about this on the CRA website here.
But before starting the reapplication process, it is important to know when the DTC will need to be renewed. Because the DTC is applied to your taxes, start reapplying for your DTC in time for tax filing season for the year in question. For example, if you were approved for the years 2010 to 2024, you would need to take action to renew your DTC in 2025.
Now that the year to renew is understood, what time of year is best to reapply?
As tax season typically goes from late February to early May, the CRA is busiest during that period. This means that they will take longer to review DTC forms during those months. However, as the CRA can take at least 4 weeks to assess a DTC form in the off-season, it is crucial to start the renewal process well before the end of the year. We recommend starting to renew a form around June or July to account for any delays or unexpected events. It’s also important to note that the DTC can be retroactive up to 10 years previously from the current calendar year, so if there is a gap in between your applications, there’s no need to worry about missing any years.
Why should someone reapply?
While reapplying is beneficial for using the DTC on yours or your caretaker’s tax returns, reapplying also ensures you have access to the other benefits related to the DTC. For a lot of people, the Registered Disability Savings Plan (RDSP) is the biggest related benefit that reapplying is important for.
If you are under 60 and have an RDSP, losing your eligibility for the DTC would freeze your RDSP until you turn 60 and can access the funds within it, or are reapproved for the DTC. If you are under 50 and eligible for the federal grants and bonds, you will not be able to access them until you are approved for the DTC again. Something good to note is that if you are eligible for the DTC again before or during the year you turn 49, the grants and bonds are retroactive up to 10 years, too. To learn more about the RDSP and maintaining it, you can visit rdsp.com.
If you would like support in renewing your DTC, we are here to help. Our Access RDSP program provides one-on-one support with the DTC form. For more information, questions, and requests for assistance, please contact Access RDSP at rdsp@disabilityalliancebc.org or 604-872-1278.
