There are three ways to file income taxes
You can file your taxes electronically (online) using NETFILE (an electronic tax-filing service that sends your tax return directly to the Canada Revenue Agency.
RDSP
Eligibility
To open your Registered Disability Savings Plan, you must meet each of these rules:
- You are a resident of Canada and file your taxes here.
- You have a Social Insurance Number (SIN). It can be a temporary SIN.
- You are younger than 59 or turning 59 in this calendar year. Note: You are only eligible for grants and bonds until December 31 of the year you turn 49.
- You are approved for or already receive the Disability Tax Credit.
Q & A
Why do I have to get the Disability Tax Credit?
The Disability Tax Credit is the doorway to the RDSP and other federal disability related benefits. Government rules say you must have the tax credit to open an RDSP. It may take some effort to get the Disability Tax Credit, but it can help you and those who support you in many ways.
The Disability Tax Credit lowers the tax you have to pay. If you do not owe any tax, you do not get any money back, because it is ‘non-refundable’. But you can still claim the tax credit on your tax return. Then, you can transfer the tax credit to an eligible caregiver, such as a member of your family. They can use it to reduce their taxes.
You can be approved for the Disability Tax Credit for up to 10 past years. That means you can claim the tax credit for previous tax returns when.
If you are not sure if you already have the Disability Tax Credit, contact Canada Revenue Agency:
- Toll-free: 1-800-959-8281 or
- Log in to your CRA My Account to check.
What happens to my RDSP if I lose my eligibility for the Disability Tax Credit?
Your RDSP will stay open, but with some limits. Take the Losing Disability Tax Credit (DTC) Tutorial to learn more.
Tip: Get money back for past years when you were eligible
If you did not know about the Disability Tax Credit before, you may be able to get some tax money back. Sometimes this can be as much as $15,000. Approval can take a few months. Start now and get the ball rolling!
Tip: Getting the Disability Tax Credit can take time
It may take a few months to be approved. Some people receive the Disability Tax Credit easily — others have a harder time. Learn more about the application process for the Disability Tax Credit.
To learn more about this, contact Plan Institute’s toll-free Disability Planning Helpline at 1-844-311-7526 or email info@rdsp.com
Why is it important to file my taxes?
Filing taxes is the only way to get the grants and bonds you are eligible for. Make sure you have filed taxes for all the years that you have been eligible for the Disability Tax Credit. The government will base your eligibility for grants and bonds on your family income from two years ago. For example, if you want to get the correct amount of grants and bonds in 2022, you should have your taxes filed for 2020 and previous years.
If the beneficiary is a child, we recommend that you start filing their income taxes when they are 16. When they turn 19, they have the option to start using their personal income to receive grants and bonds.
Tips
Tip: Government grants and bonds end when you turn 49, so start early
After the calendar year in which you turn 49 years of age, you can no longer get government grants or bonds. This is true even if you were eligible for them in earlier years. It is better to open the RDSP as soon as you can. This maximizes both personal and government contributions. Starting early also allows your savings to grow more through investment and compounded interest. If the RDSP is opened early enough, you may be able to take out money at a younger age without any penalties.
Resources
