When you’re dealing with disabilities, whether for yourself or your child, it can often feel like navigating a never-ending maze of paperwork and programs. The last thing you need is more administrative hassle, right? Well, when it comes to the Disability Tax Credit (DTC) and the Registered Disability Savings Plan (RDSP), the good news is that the paperwork is more manageable than you might think. And the benefits? They far outweigh the cons.
With that said, here is what you can gain:
- Through the DTC, you can see a decrease in your taxable income by over $8,500 per year if you’re over 18. If the beneficiary is under 18 this figure gets a supplement of approximately $5000. That means you could reduce your taxable income by up to $13,500 per dependent per year.
- You reclaim unused entitlements up to 10 years back. For the Tax credit, that could equate to THOUSANDS in retroactive refunds! This figure varies depending on the individual’s situation, although it is not uncommon to see refunds of up to 10, 15, or even 20 thousand dollars in refunds!
- The DTC will open up availability to other federal programs like the Child Disability Benefit. For households with an income of under $71,060, you can get up to $2,985/year per child that qualifies. 248.75/month in untaxed government funding for you and your family
- Once you have the DTC in place, you can look at the RDSP. This is a long-term savings plan that gets more government contributions than any other registered account by a long shot!
- Through the Bond, you can receive up to $1000/year from the government with NO CONTRIBUTIONS, so essentially FREE MONEY!!!!
- Through the Grant, you can receive matching contributions on the first $1000 or $1500 (depending on income bracket) These matching contributions are 1:1 and up to 3:1 respectively. That means, for higher income households, you can contribute $1000 and get a matching grant of $1000. For lower-income households, you can contribute $1500 and receive $3500 in grants!!
- Similar to the DTC, you can reclaim unused entitlements up to 10 years back. The maximum you could receive in the first year of opening an RDSP is $11,000 in Bonds with $10,500 in Grants.
Let’s break it down:
if you qualified for the DTC 10 years ago, and are just applying for it as well as the RDSP. You could see a refund of up to $20,000 through the DTC, with another $20,000 in bonds and grants through the RDSP. While getting almost $250/month for the CDB and thousands in bonds, grants and tax credits for every year going forward... If the potential for over $50,000 worth of value in the first year of setting this account up, isn’t enough to get you jumping out of your seat. Make sure to listen to this last part…
Not only do these programs turbocharge your long-term savings, but they also DO NOT in any way formally label you as disabled! In fact, many of the people claiming the DTC are minimally impaired, just slowed in their daily activities.
Since these accounts are placed with investment institutions, they can grow exponentially and you are getting government contributions EVERY YEAR that you qualify. If you set up the right plans from the start, by the time your child/disabled dependent comes to retirement age, they could be a millionaire!!! I know, this sounds too good to be true, but it is VERY achievable
If you’re interested in learning more, check out this presentation I did with Autism Society Alberta, or better yet contact me directly or come to a live session!