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Intro to RDSPs and the Disability Tax Credit

If you recently received a letter about RDSPs (Registered Disability Savings Plans), good news. This letter tells you how to apply for free and matching government money(Make sure your letter is really from the Government of Canada though, and watch out for scams!) 

Calgarians and their dependents who hold a valid Disability Tax Credit Certificate may have received these detailed instructions in the mail in FebruaryBut what should you know about these benefits if you receive AISH?

In preparation for April’s tax filing deadlineHiroko Nakao, facilitator for the Money Matters programexplains the main points of these government benefits.  

What is the disability tax credit?

The Disability Tax Credit (DTC) is​ a non-refundable tax credit, which means it decreases the amount of income tax that you pay on your tax return. If you qualify for the DTC you may be eligible for, and can apply for, other disability benefits. 

Do I qualify for the disability tax credit? 

This tax credit is a federal program (not provincial like AISH) so the qualifications are slightly different. For example, to be eligible for the DTC: 

  • Impairment has lasted (or will last) min 12 months AND 
  • Is present minimum 90% of the time 

We answer some common questions about eligibility in our RDSP DTC info session, but you can ask questions in real-time during the Canada Revenue Agency’s webinar on the Disability Tax Credit, March 13, 2021. Register here

What is a Disability Tax Credit Certificate and how do I get one? 

Although it’s called a “certificate” the Disability Tax Credit Certificate is actually the form that you use to apply for the DTCBoth the applicant and a medical practitioner will complete a portion of this form. 

Register for our May 27 webinar with the Canada Revenue Agency to learn even more about how to apply, and other disability benefits available. 

Registered Disability Savings Plan (RDSP) and how to apply 

An RDSP is a long-term savings plan for persons with disabilities and their families. This 2-minute video explains the main benefits and how taxes apply to this sort of plan 

To open an RDSP, follow these three steps: 

  • Step 1: Decide who it is for (e.g. yourself or your family member) 
  • Step 2: Choose who will manage the account (e.g. yourself or someone else) 
  • Step 3: Make an appointment with your bank or credit union 

Every dollar of personal contribution is matched by the government by up to $3 – this money is called the Grant.  

If your family income is less than a certain amount per year, you can receive money from the government without contributing any of your own. This money is called the Bond.  

To apply for these Grants and Bondssubmit an application form through the financial institution where your RDSP is held.  

The CRA website lists everything you need to know about Canada Disability Savings Grants and Bonds. If you are eligible for the DTC and under 60 years of age, you may be eligible. 

Make a plan for your tax refund 

The Money Matters program educates and reduces stress for people living with mental health and/or addiction challenges. In class, we discuss benefits available for AISH recipients, basic banking concepts and setting savings goals. Learn more here 

If you can save $40 of your tax refund, consider joining the Momentum Savings ChallengeEach time you save, you’ll earn cash rewards. Quit at any time, or keep going to earn more. Participants automatically qualify for QUBER’s Save to Win grand prize. Learn more about the Momentum Savings Challenge, here.