# I have just received disability tax credit approval - should I see my accountant?



## Darren (Mar 15, 2015)

Hi everyone.

For the past 4 or 5 months I have been working with an accountant to catch up on my back taxes. I just recieved an electronic notice from Revenue Canada that I have been approved for the disability tax credit
( DTC ). My question is , should I visit my accountant and get him to update my tax returns for the years
approved ( 2007 forward ) , or should I assume that Rev Can will do this adjustment for me?
I sort of gathered from the notice that I need to look after the tax return changes myeslf ( or my accountant) but I would really appreciate some feedback about this matter. Should I advise my accountant 
and leave it to him to make the appropriate changes?
My main, outstanding goal, is to have my taxes up-to-date, and finding out how much I need to pay, or how much I may receive back. I have made a very serious vow to myself to never let my tax returns fall 
behind again. What a long, stressful ordeal this has been. 

Thank you for any advice, and feel free to ask me any pertinent information.
Best regards,
Darren.

PS- could someone please advise me as to roughly how long it will take for Rev Can to revise my taxation
information to reflect this change, after I ( or my accountant ) has registered the changes with Rev Can? 
I know very little about these issues, and any help will be very appreciated.


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## sags (May 15, 2010)

You have been approved by the CRA to "apply" for the credit. You have to apply for it.

You can apply retroactively for the years indicated by the CRA notice of approval.

You can do it yourself online or have your accountant do it for you.

You can make the changes from a "My CRA' account on the Service Canada website.

You can access archived tax returns and file for an adjustment electronically by filling out the form for "each" year affected.

The CRA will update within a couple of weeks. It will show that it is pending until the reassessment is completed.

The tax deduction will accumulate and reduce the amount of taxes currently owed first and provide a refund if warranted.

The reduction in taxes owed will include a credit for interest applied to the outstanding balance.

If you don't have a My CRA account, you should register for one. All your information is then available in one place.


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## sags (May 15, 2010)

Since your accountant is already involved, I would recommend you advise them you have been approved for the DTC for 2007-2015.

Each of the years has a slightly different DTC credit, but 9 years of credits will be a substantial reduction in taxes owed.


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## GreenAvenue (Dec 28, 2011)

We were approved in 2012 and within 6 weeks the CRA sent us notifications of revised taxes for each year and we received a substantial amount which was paid out in two parts. So if you have your taxes done at this point I would wait until they respond back and then go back to your accountant to see if the amounts calculated are correct.


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## carverman (Nov 8, 2010)

sags said:


> Since your accountant is already involved, I would recommend you advise them you have been approved for the DTC for 2007-2015.
> *
> Each of the years has a slightly different DTC credit, but 9 years of credits will be a substantial reduction in taxes owed.*


It doesn't have to be done through a accountant, unless the account is doing your tax returns for you.
You can also apply for the retroactive refund as long as you use the proper forms and send them in for each year with
the amount of income you want adjusted because of the DTC.

When I applied for my DTC about 4 years ago, my doctor asked me what year I wanted to put down on the application as the start of my disabilty. The DTC is only good for 10 years unless you reapply again after the 10 years have expired.

In my case, before I set up an account with CRA, I used a period 6 years before the year of DTC application (2012) ,
as my "start year", which was 2005 and it encompasses the DTC credit for years 2005->2015. I had to renew with a
new applcation signed by my doctor before December 31 of 2015, so I'm good as my disabilty is considered permanent
and CRA sent me a letter that I don't need to send in any more forms from now on due to the 10 year expiry stipulation.

I do my own taxes using the T1 general paper forms, so I had copies of my returns 7 years back and was able to
add the difference at the appropriate line where the DTC amount is stated for each tax year on a T1 ADJ form and sent in a form for each taxation year from 2012 tp 2005 (7 years). After 2012 for the 3 years taxation years allowed on my DTC, I just added in the DTC credit for each year from 2013 to 2015. 

The DTC amount is added up to the rest of the Federal Non-refundable tax credits that may apply.
CRA will also adjust the provincial Disability amount and give you a refund for each tax year that the DTC applies along with any accrued interest on the DTC refund. 
In my case I received a SUBSTANTIAL REFUND for the 7 years back. CRA will do a re-assessment for each taxation year that the DTC credit applies as well, and they mention to include any interest they pay on the refund in your next years tax return. 

However as of 2012, I don't need to deal with any DTC adjustment online with my CRA account because I don't have to anymore. I just include the DTC amount on my return. 

You may need to know this, and specify what the amount was on line 316 of the Federal Tax form (Schedule 1).


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## carverman (Nov 8, 2010)

Darren said:


> For the past 4 or 5 months I have been working with an accountant to catch up on my back taxes. I just received an electronic notice from Revenue Canada that I have been approved for the disability tax credit
> ( DTC ). My question is , should I visit my accountant and get him to u*pdate my tax returns for the years
> approved ( 2007 forward* ) , or should I assume that Rev Can will do this adjustment for me?


Don't assume anything with CRA where they have to recalculate your previous years assessment. That would have to be triggered by something like the proper form which is a T1-ADJ or doing it online if you have an account with them,




> *I sort of gathered from the notice that I need to look after the tax return changes myself* ( or my accountant) but I would really appreciate some feedback about this matter.


You CAN do it yourself, if you know how to do it. 
I do my own taxes since they are relatively simple on a T1 General each year. So it was just a simple matter of printing off the T1-Adj form online,
http://www.cra-arc.gc.ca/nwsrm/txtps/2015/tfsk13-eng.html

filling out the amount of difference between tax credits* before *the DTC was granted, and then *after* the DTC was granted at the appropriate line number on your Tax return, totalling the amount and signing and dating each form for the tax year you want CRA to re-assess you. Send the forms (all of them at once in one envelope) to CRA and they will re-assess your tax return for the years you apply for a additional refund for the years the DTC has granted to you by CRA. 
You can also do it online with CRA if you open up an account with them. 



> Should I advise my accountant and leave it to him to make the appropriate changes?


If you don't do your tax return on a regular yearly basis and don't keep copies of your returns (up to 7 years back), it can be a bit confusing to apply for it on the T1 ADJ forms. You need to print off the T1-adj form and make several copies of the blank form (one form for each tax year you are requesting CRA to reassess you), fill out each form for the taxation year involved, and then *make copies of the filled out form for your records before you send in the signed original forms.*



> My main, outstanding goal, is to have my taxes up-to-date, and finding out how much I need to pay, or how much I may receive back. I have made a very serious vow to myself to never let my tax returns fall behind again. What a long, stressful ordeal this has been.


That is why you need to file every year. You never know when you may need that DTC credit. :friendly_wink:

.


> PS- could someone please advise me as to roughly how long it will take for Rev Can to revise my taxation
> information to reflect this change, after I ( or my accountant ) has registered the changes with Rev Can?


Depending on the time of the year (busy tax season around end of April) or during any other time of the year, the time taken to adjust your DTC year(s) returns can vary. 

I sent in my T1-adj forms in the summer of 2012, and it took about 60 days for CRA to reassess me for 7 years
back, and deposit a single substantial refund to my CRA account with them. 

They also calculated any interest owing to you on those DTC credited back payments, (refund for each individual DTC tax year), and the re-assessment forms that come with your income for the tax year being re-assessed due to the DTC.
The interest has to be reported in the following taxation year return.

_If you owe them any money (due to late filing/not filing) ,that amount you owe on any refund for a given year will be subtracted from the refund payment along with any interest owing to them. _
Going back a few taxation years, the interest accumulated will be a lot more than the interest they would normally pay you on the refund.


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## sags (May 15, 2010)

The CRA will not refund penalties and interest charges for late filing. The DTC doesn't affect late filing charges.

They will refund interest on the reduction of money owed in back taxes, as they were affected by the DTC deduction.


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## carverman (Nov 8, 2010)

sags said:


> The CRA will not refund penalties and interest charges for late filing. The DTC doesn't affect late filing charges.
> 
> They will refund interest on the reduction of money owed in back taxes, as they were affected by the DTC deduction.


Yes, I didn't mean late filing penalties. what I was trying to say is, if you owe them money because you didn't file in the years of the DTC applies that you are backdating now for an adjustment, they will deduct that from any refund they pay you.


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## OhGreatGuru (May 24, 2009)

The letter of acceptance from CRA for your Disability Tax Credit Certificate should say when it was effective, and what year (if any) they are currently adjusting. If the application for the certificate was back-dated by your doctor, the letter of acceptance will ask if you want them to re-assess earlier years. All you should have to do is send them a letter saying yes, please do. If all you are claiming is the basic disability amount on Line 316, it shouldn't require your accountant. But if you intend to claim additional medical and care expenses under Line 330, you may need assistance, because CRA will not currently have any information on the expenses you wish to claim.

PS - Since you have been working with your accountant on your "back taxes" anyway, I suggest you run it through him regardless, so he is up to date.

PPS - I don't know what form this "electronic notice" from CRA takes. If it does not include all the above-mentioned information, it probably tells you to go to your account on their web site for complete info.


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