Disability tax credit

T1
1

I just started using Taxcycle for 2021 personal tax returns and love it.
I have 2 clients that have just given me information that they have been approved for the Disability Tax Credit after filing late T2201 forms. They are both allowed to go back a few years to claim the credit.
My question is, does Revenue Canada automatically process the credit for the years that they are allowing or do I have to go back and file T1ADJ forms for each year in question?
I have not prepared TaxCycle returns for any of the previous years.

Sorry for the question but I am a small time sole proprietor and have never come across this before, so instead of a phone call to CRA and getting 20 different answers I would ask here.

Thanks in advance.

2

The letter from CRA to your client will tell you the time frame for disability credit. If they are approved from back dared then you can perpare the T1Adj.

1 Like
3

You need to check the copies of the Disability Application to see if they checked the box allowing the CRA to make the adjustments. If checked there is nothing for you to do - if not, you need to file amended returns for the allowed years - Klaus, Exact Tax Service

3 Likes
4

If you go into the person’s rep a client and the disability credit shows up in their disability section as being approved but the tax returns in question don’t show as being in process/already adjusted then you need to fix it. Sometimes the CRA fixes it automatically (especially if you ticked the box Klaus talks about but not always) and sometimes they don’t.

2 Likes
5

@etservice1978 if the wife is approved for the disability tax credit for prior years, do we need to file the spouse tax return as well to optimize the benefits?

6

Yes it is best to do so. They may ask for it. It gives them the net income so that you can claim the most of the transfer