Disability Tax Credit and Canada Disability Benefit

[user17573523492]

I have been claiming the DTC on my return for years and now my daughter requires to file a tax return to be eligible for the Canada Disability Benefit.  How do I answer the TurboTax question on her return with regards to her disability.  Do I answer "No" to "Are you disabled" question so that TurboTax doesn't try to claim the Tax Credits as I'm claiming them under my return?

[TurboTax_Susan]

Do you mean that your daughter is disabled, and she's been transferring her DTC to you? In order for her to transfer her unused DTC credit, she would first have to claim it on her return, so yes, you would answer that she is disabled.

[user17573523492]

Not exactly,  She is disabled but i'm not looking to transfer the DTC to her as she has no income.  I will continue to claim DTC as i have for years.  I'm filing her first tax return as required for her to get the Canada Disability Benefit (she is 17.5yrs old) Using TurboTax to file her return and want to clarify how to answer the EasyStep question are you disabled.  I'm wondering if I should answer Yes or No as I don't want her to claim the DTC.

[TurboTax_Susan · Accepted solution]

If you are the one eligible for the DTC and not transferring it to your daughter, then it doesn't matter if you answer Yes or No to the "are you disabled" question on your daughter's return.

If your daughter is the one eligible for the DTC, then she needs to claim it on her return first and then transfer any unused amount  to you. It's the same if she was transferring tuition to you. 

[user17724520612]

Do I have to say I’m disabled because I qualify for the DTC?  My husband is disabled but they approved it for me.  Would you mind clarifying?

[TurboTax_Susan]

@user17724520612 To get DTC (Disability Tax Credit), you need a Form T2201 - Disability Tax Credit Certificate, which shows what disabilities or impairments you have. If the person who's disabled doesn't need the whole credit, they can transfer all or part of the credit to a supporting family member, who is listed on the T2201.

So if the T2201 shows you as the disabled person, then yes, you must indicate that you are disabled to take the DTC. If it's your husband that is the disabled person, then he must indicate that he is disabled, so that he can claim the credit, and then transfer it to you.