Tax Strategies
If you are a person with a disability or care for and support a person who has a disability, it is important to be aware of the various tax measures and government funded programs that may be available to you or your loved one.
Why are tax strategies important?
Canadian income tax rules allow certain persons with a disability, and sometimes their financially supportive relatives, to access special tax credits, deductions and savings vehicles. As well, both the federal and provincial governments offer programs that provide benefits to disabled individuals.
Tax Credits/Deductions
- Disability Tax Credit
- Eligible Medical Expenses
- Canada Caregiver Credit
- Home Accessibility Credits
Government Services/Programs
- Child Disability Benefit
- Provincial income support (ODSP)
- Registered Disability Savings Program
- CPP Disability Benefit
- Home Buyers Plan
RRSP Rollover on Death
The rules governing RDSPs allow for a tax-free rollover, through the Will, of the proceeds of a deceased’s RRSP, RRIF or pension to an RDSP of the deceased’s child or grandchild who has an impairment in physical or mental functions, and who was financially dependent on the deceased when they died. This can result in significant tax savings for an estate while providing financial security for a child or grandchild with a disability.
Registered Education Savings Plan (RESP) Rollover
If an RESP and an RDSP plan have a common beneficiary, and the beneficiary is unable to attend post-secondary education, you may be able to rollover the Growth portion of the RESP to the RDSP, without incurring a penalty or immediate taxation.