Disability Tax Credit Certificate vs CPP Disability Benefit

Disability Tax Credit Certificate
Individuals who have an impairment in physical or mental functions that is severe and prolonged use Canada Revenue Agency (CRA) form T2201 to apply for the Disability Amount. The Disability Amount is a non-refundable credit on your annual income tax return that can save up to $1726 (if you are Ontario resident) of income tax. If the taxpayer does not have tax owing, all or part of the Disability Amount can be transferred to a spouse, or to another family member on whom the taxpayer is dependent.

Canada Pension Plan Disability Benefit
The Canada Pension Plan (CPP) disability benefit is a monthly payment you can get if you:
• are under 65
• have made enough contributions into the CPP
• have a mental or physical disability that regularly stops you from doing any type of substantially gainful work
• have a disability that is long-term and of indefinite duration, or is likely to result in death

The CPP disability benefit is taxable income.

The Disability Tax Credit Certificate and the CPP Disability Benefit are separate from one another, and have significantly different eligibility criteria. The similarity in their names often leads to confusion and the assumption that if an individual qualifies for one, they automatically qualify for the other. And that is not always the case.  

Each program has its own criteria, and its own application process. You can find information for each program on the Government of Canada website www.canada.ca.

We hope you will find this information valuable and will increase your financial confidence. You can always find these articles on our website anytime at www.actionfinancialgroup.com.

Karin Rimnyak, Certified Financial Planner®
Investment Advisor
Insurance Advisor, Action Financial Group Ltd.

David Dryburgh, Certified Financial Planner­®
Investment Advisor

Insurance Advisor, Action Financial Group Ltd.

Ian Barrie, Certified Financial Planner®
Investment Advisor

Insurance Advisor, Action Financial Group Ltd.

This information has been prepared by Karin Rimnyak who is an investment Advisor for iA Private Wealth. Opinions expressed in this email are those of the Investment Advisor only and do not necessarily reflect those of iA Private Wealth. iA private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.