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Jeff Green | Mar 30, 2006

Legalese - March 30, 2006

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Legalese - March 30, 2006 Twelve tax tips for your 2005 return Part Iby Heidi Lazar-Meyn, Lawyer, and HarryBeatty, Barrister and solicitor

This article originally published in ARCH ALERT, the newsletter of ARCH: A Legal Resource Centre for Persons with Disabilities, a specialty legal clinic in Toronto.

Filling out your income tax return for tax year 2005 may be more confusing than usual. In November 2005, the minority Liberal government tabled a Ways and Means Motion (“Motion”) based on the federal Budget for 2005. This Motion included proposed changes to the Income Tax Act (“ITA”). Many of these changes were recommended by the Technical Advisory Committee in its Report, “Disability Tax Fairness”. You can find out more information about this report in the article in the March 2005 issue of ARCH Alert.

As explained in more detail later in this article, if the proposed changes become law, they would:

make more persons medically eligible for the Disability Amount (also known as the Disability Tax Credit, or “DTC”), add new items for which taxpayers can take the Disability Supports Deduction (“DSD”) and add new items for the medical expenses tax credit (“METC”), and increase the amount of the credit that the taxpayer can take for expenses paid on behalf of certain dependants.

Parliament was dissolved before it had a chance to pass a Bill based on the Motion, so these changes never became part of the ITA. However, they are included in the income tax forms and instructions for tax year 2005, as if they have become law.

Flood

No one knows for certain whether the present minority Conservative government will pass a Bill to make these changes part of the ITA. However, based on the experience with previous changes of government, it would be very unusual for a new government to make retroactive changes once the Canada Revenue Agency (“CRA”) has published its materials for a given taxation year. Therefore, you should file your 2005 return as if the proposed changes were already in effect, but you should be aware that further changes to disability-related tax claims may be coming. Your tax advisor can explain further.

1. Your 2005 income tax return must be postmarked or received by CRA before midnight on 1 May 2006 because 30 April falls on a Sunday. If you or your spouse or common-law partner is self-employed, the deadline for filing is extended to 15 June 2006, but the deadline for paying any taxes that you may owe remains 1 May.

If you expect to get a refund, it is best to file early, so you receive the refund as soon as possible. If you get a letter telling you that your refund has been withheld because you were overpaid social assistance benefits by the Ontario Disability Support Program or Ontario Works, you should ask your local community legal clinic for advice.

You are able to file your tax return many different ways, including by filing a paper return. If you prepare your taxes yourself using a computer program, you can file it over the Internet. Some tax preparers also can help you to file your taxes electronically.

You may be able to "telefile" your return by entering the information on a touchtone telephone. If you are unable to use a touchtone telephone because of a disability, you can get help in telefiling from CRA by calling 1.800.714.7257.

2. CRA has promised the Canadian Human Rights Commission that it will give persons who have a visual impairment all of their personal tax information in the alternate format of their choice. You can choose to get the information in Braille, large print, electronic text on a diskette or a CD, audio MP3 or audiocassette format.

You only have to telephone CRA once to request personalized materials. After that CRA will automatically send them to you in the format that you asked for. The number to call is 1.800.959.8281.

Unfortunately, if you want to get general tax forms and publications in an alternate format, CRA will not send them to you automatically even if you have asked for your personal tax information in that format. See Tax Tip #3 for information on how to order general forms and publications in an alternate format.

3. CRA's website gives general tax information for persons with disabilities. The address is: http://www.cra-arc.gc.ca/disability

That page has links to forms and publications, including a pamphlet called, "Information Concerning People With Disabilities" and CRA's Interpretation Bulletin IT-519R2, "Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction (Consolidated)". The Interpretation Bulletin is helpful but it has not been updated since 2001, so it does not include information about the DSD, for example.

CRA also has other documents that may help you in preparing your taxes. The General Income Tax and Benefit Guide (“Guide”) is available for pick-up at most post offices and CRA will mail it to you if you call 1.800.959.2221. If you prefer an alternate format, such as Braille, large print, audiocassette or e-text, you can download some forms and instructions at www.cra.gc.ca/alternate or you can order them by calling 1.800.959-2221.

For more information on other forms and publications that are available, you can download or order them from CRA's website, www.cra.gc.ca, or call the General Enquiries number at 1.800.959.8281. The CRA also has a TTY number: 1.800.665.0354.

Persons who have simple returns and low incomes can get free help with completing their tax returns. For further information on the Community Volunteer Income Tax Program, call CRA's General Inquiries line at 1.800.959.8281.

Part II

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