Disability Tax Credit - And Avoiding CRA Penalties!

For Personal & Business Clients:

CRA Penalties - What You Should Know

Missing deadlines or submitting incorrect information to the CRA can result in significant penalties - whether you're filing personally or on behalf of a business. These penalties apply to information returns, including T4s, T5s and NR4s.

  • Late Filing: If a required return is filed late, the CRA may charge $25 per day, up to 100 days. That’s a minimum of $100, and can reach up to $2,500.

  • Gross Negligence: If the CRA determines the delay was due to intentional disregard or carelessness, the penalty increases to $500 per month, for up to 24 months - a maximum of $12,000.

  • False or Misleading Information: Providing incorrect details can result in a penalty of $2,500 or 5% of the amount involved, whichever is greater. In some business cases, this can go up to $24,000.

  • Failure to Comply with a Formal Demand: If the CRA issues a formal request to file and it’s ignored, the penalty is $1,000 per month, up to 24 months (maximum $24,000).

These Penalties Apply to Forms Like:

  • T4s - Statement of Remuneration Paid

  • T5s - Statement of Investment Income

  • NR4s - Statement of Amounts Paid to Non-Residents

If you're unsure whether you or your business are required to file any of these forms, or if you need help ensuring everything is submitted accurately and on time, we’re here to help!

The Disability Tax Credit (DTC)

Don’t miss out on tax credits you may be eligible for!

The DTC is a great way to reduce your taxes if you or a family member has a severe and prolonged impairment.

You may qualify if:

  • You have marked restrictions in areas like walking, dressing, or mental functions.

  • You have significant limitations in two or more areas.

  • You require life-sustaining therapy.

NOTE: To apply, you’ll need a medical practitioner to complete Form T2201. Once approved, you could access other benefits like the Child Disability Benefit or the Registered Disability Savings Plan (RDSP).

Not sure if you qualify? Let’s chat - we can walk you through the process!

Stephen Aubert CPA