The Taxpayers’ Ombudsperson has asked the Canada Revenue Agency (CRA) to improve lead time and communication when processing complex T1 adjustments for tax filers with disabilities and their supporting family members.
Those eligible for the disability tax credit (DTC), or their supporting family member, can request that the credit be applied retroactively for up to 10 previous tax years.
While the CRA has a 20-week standard for complex adjustments, the Office of the Taxpayers’ Ombudsperson (OTO) said it received complaints that it can take up to 50 weeks for the CRA to process a T1 adjustment.
It can also take up to 15 weeks to approve DTC applications, nearly double the CRA’s eight-week service standard.
“These issues are causing financial strain and unnecessary frustration for vulnerable taxpayers who rely on these tax credits to offset some of the costs related to the disability,” the OTO said in a statement Wednesday.
While some complex T1 adjustments go beyond the normal three-year reassessment period and take longer, the CRA doesn’t inform taxpayers about the extended processing times, leading to confusion for tax filers, the watchdog organization said.
“Many affected taxpayers who contact our office seem unaware of the additional processing time for T1 adjustments and only find out when they contact the CRA to ask about the status of the payment,” the OTO said.
The CRA currently processes all T1 adjustment requests on a first-in, first-out basis, which treats tax filers with disabilities the same as other tax filers. The Taxpayers’ Ombudsperson asked the CRA to change the process to prioritize adjustments related to the DTC.