Transfer of Disability Tax Credit

[gtip]

I am preparing a tax return for a deceased elderly person.  She does not need the Disability Tax Credit but can transfer the $8,870 to her adult daughter, who is also her caregiver.  How do I transfer the $8870 so that it is not being claimed on the mother's return?  I can't find the schedule or place on the Federal Worksheet that transfers that amount.

Can someone help?

Thanks very much.

[TurboTaxGinette]

As per the Canada Revenue Agency (CRA): Transferring the credit 

If the person with the impairment does not need the entire disability amount to reduce their income tax, they may transfer some or all of the disability amount to the supporting family member who is identified on the DTC application form (Part A question 2).

Who qualifies as a supporting family member

If the supporting family member who wants to claim the credit was not identified on the initial application, they can submit a written request to the CRA for the transfer. This request must be signed and include details of the support they provide for the basic necessities of life.

For guidance, please see our TurboTax FAQ How do I claim the Disability Tax Credit transferred from my dependant?

Thank you for choosing TurboTax.

[BSBNorthBay]

To see the deduction for disability in Turbotax please do the following:

Look at the left hand navigation pane then find the word deductions.  Click the deductions button and look for disability near the bottom.  (Right above students.)  The T1 / Federal worksheet line numbers for the disability are found on line 31600 and the disability transfer is found at line 31800.

[gtip]

Hi and thanks for the reply.  I am familiar with the material you have referenced, however, it does not answer my question.  My question is "Where do I enter the transfer of the DTC on the tax return of the person transferring the credit?"  The return shows the $8870 tax credit on line 31600.  However, I want to claim $0 on line 31600 and transfer that credit to the daughter.  How do I do that on the tax return of the person transferring the credit?

Thanks very much.

[TurboTaxGinette]

The transfer does not go on your return only on the transferee's return if the Disability Tax Credit(DTC) agreement was already accepted with this person's name to be transferred (adult daughter and not mother). If the mother's name is on the DTC then only she can get the transfer.

Thank you for choosing TurboTax.

[gtip]

Got it.  I can then just override line 31600 and set it to $0 so it doesn't automatically enter $8,870.

Thanks for your help!  Much appreciated.

[TurboTaxGinette]

No, to claim the Disability Tax Credit (DTC) and then transfer, you need to have the amount in line 31600 of the deceased person's tax return. If the amount is not there, the transferee will not be able to transfer it on their line 31800 in their return.

Here is a TurboTax video on how to claim the DTC: How do I claim the Disability Tax Credit?

Thank you for choosing TurboTax.

[gtip]

Doesn't that mean both taxpayers are claiming the DTC?  I don't understand how that gets resolved.

[TurboTaxGinette]

It means one claims the Disability Tax Credit amount and the other claims the left over unused part to transfer. The system at the Canada Revenue Agency will compare the file online to make sure the right person, who has been included in the original agreement, will be the one to get the transfer when applied for as seen in this Canada Revenue Agency link: Claiming the credit.

In order to help you with this situation, we believe your best option is to contact our telephone support team if you're in need of further assistance, as they have the option to view your screen to help and guide you. To contact them, please follow this link: Contact Us. 

​​​​​​​Thank you for choosing TurboTax.
 

[gtip · Accepted solution]

I phoned CRA about this and they advised that the taxpayer needs to claim the $8,870 amount on line 31600 and CRA will see that the full amount is not needed to be claimed and can therefore be transferred to the daughter.  The daughter will claim the amount that can be transferred on line 31800 of her tax return.  So, in effect, the Disability Tax Credit will appear on both of their returns.  Seems odd but that is the way it is to be done.  Thanks to all who have responded, especially TurboTaxGinette, who had the correct response, which I questioned 😃