Loans Canada Launches Free Credit Score Portal And Is Recognized As One Of Canada’s Top Growing Companies
Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
According to a 2017 Statistics Canada report, one in five Canadians have one or more disabilities. Many of these people struggle with chronic pain, limited mobility, and mental health. They have difficulty maintaining employment, need supervised care, and face many financial challenges that push them into poverty.
To help alleviate some of the financial challenges persons with disabilities face, the Canadian government has instituted the disability tax credit.
The disability tax credit (DTC) is a federal non-refundable tax credit that can be utilized by persons with disabilities to reduce their tax burden. The credit allows the taxpayer to obtain a refund upon completion of their tax return, which can be used to pay for the additional expenses required to care for a person with a disability.
Your disability must fall into one of these categories to qualify for the DTC:
You must provide proof that your impairment is chronic, having lasted at least a year, or the expectation is that it will last at least a year.
Learn more on how to qualify for the disability tax credit.
For 2020, the federal tax credit is $8,576. The DTC’s actual dollar amount is calculated by multiplying the $8,576 amount by the tax brackets your income corresponds to at the federal and provincial levels. For example, if you live in Ontario and earn $40,000 a year, the dollar amount of the credit would be worth $2,401 (15% federal and 13% provincial). Also, a supplemental credit amount worth up to $5,003 available to taxpayers under 18 years of age.
The DTC can provide a sizable amount of financial relief to those living with a disability: it can be carried back up to 10 years, resulting in tax refunds worth tens of thousands of dollars.
Despite the enormous financial benefits offered by the DTC, relatively few Canadians are aware of it. One common cause of this lack of familiarity is the complicated application process and painfully slow approval process. To ensure the highest possible chance of gaining approval for the DTC, some applicants have sought help from disability tax credit consultants.
Are you a senior in Canada? Check out these tax benefits for seniors.
The application process for the DTC is complex, lengthy, and frustrating. Overlooking even one crucial detail can be the difference between approval and rejection. It can take months or even years to obtain permission for the credit. Even seasoned doctors and accountants have difficulty helping individuals complete the forms correctly – the doctors are not well-acquainted with the DTC application’s tax aspects while accountants are not well versed in the medical aspects. For these reasons, many people don’t bother with applying in the first place, thus losing out on the significant financial benefits provided by the DTC.
Disability tax credit consultants are experts who specialize in guiding individuals through the DTC application process, ensuring each required piece of information is presented and submitted correctly. They have the knowledge and experience to maximize a person’s chances of receiving approval.
Have a child with disabilities? Check out all the tax benefits available for parents.
A disability tax credit consultant can help you in several ways:
Check out how you can get a loan using your tax benefits like the CCB.
Like any other service, helping individuals prepare their DTC application comes with a price. If you hire a DTC consultant, expect the pay the following:
An approved applicant can easily pay thousands of dollars in contingency fees to a DTC consultant, greatly reducing the amount they have leftover. The CRA estimates that in 2019, DTC consultants collected between $9.5 million and $25.4 million in contingency fees. Not surprisingly, there has been an outcry in recent years from those who believe DTC consultants charge excessive rates. They support a cap on fees as a remedy to the problem.
In response, the federal government has proposed a series of upcoming rules to rein in the rates charged by DTC consultants. These rules are part of the Disability Tax Credit Promoters Restrictions Act (DTCPRA).
Most notably, the DTCPRA mandates a flat rate on contingency fees instead of a percentage based on the refund amount. The flat fees are:
Are you filing your tax return soon? Check out these tax tips for low-income earners.
The above fees are the maximum a DTC consultant can charge for assisting individuals with their application. The capped fees don’t apply to a DTC consultant’s work helping an individual appeal a rejected application. Also,
The fee limits don’t affect medical professionals who aid applicants by completing Part B of form T2201. Provincial regulations and medical associations govern the fees they charge.
The DTCPRA also provides details on penalties levied on DTC consultants who charge more than the fees outlined in the regulations. These penalties can range from $1,000 to $25,000. Consultants are required to reimburse clients they overcharge.
Having trouble keeping up with your medical expenses? Check out how a short-term loan can help with emergency expenses.
If you aren’t confident about completing the application on your own but feel that you would strongly benefit from the DTC, you should consider hiring a qualified DTC consultant. Until the fee limits under DTCPRA come into effect, be sure to thoroughly examine each consultant’s experience, knowledge, and most importantly, the fees they charge.
Rating of 5/5 based on 4 votes.
Borrow up to $50,000 from Fairstone and be automatically entered to win up to $5,000!*
Earn an average 5%¹ cash back at thousands of partners and at least 0.5%² cashback guaranteed.
Build credit while spending money with the Refresh Financial VISA card.
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.
Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.