The disability tax credit

The disability tax credit (DTC) lowers the income tax paid by a person with a severe and prolonged impairment, or by a family member who supports them. You apply first, with help from a medical practitioner, and claim the credit on your return once the CRA approves you.

What the credit does

The DTC is a non-refundable credit: it reduces income tax you owe, but any part you can’t use isn’t paid out to you. If the person with the impairment doesn’t need all of it, the unused part can be transferred to a supporting family member.

The disability amount is set each year, and there is an extra supplement for people under 18. The CRA lists the amounts for each of the past 10 tax years on its claiming the credit page.

Approval matters beyond the credit itself. It can open the door to a registered disability savings plan (RDSP), the Canada workers benefit disability supplement, the child disability benefit and the Canada Disability Benefit. If you think you may qualify, the CRA encourages you to apply.

Who is eligible

A medical practitioner has to certify that you have a severe and prolonged impairment in one of these ways:

• A marked restriction in one category: walking, mental functions, dressing, feeding, eliminating (bowel or bladder functions), hearing, speaking or vision. Marked means you can’t do the activity, or it takes you three times longer than someone of similar age without the impairment, even with therapy, medication and devices.
• Significant limitations in two or more categories whose combined effect is equal to a marked restriction.
• Life-sustaining therapy that supports a vital function.

The restriction has to be present all or almost all of the time (generally at least 90%) and has to have lasted, or be expected to last, at least 12 months in a row. Qualifying for another federal or provincial disability program doesn’t make you eligible for the DTC on its own.

How to apply

The application has two parts. Part A is filled out by the person with the impairment or their legal representative. Part B is filled out only by a medical practitioner. Both parts must use the same method:

• Digital: complete Part A in your CRA account or by phone. You get a reference number, valid for up to 12 months, which you give to your practitioner so they can submit Part B online.
• Paper: use Form T2201, Disability Tax Credit Certificate, and mail it to a CRA tax centre. Don’t send DTC forms through the “submit documents” feature of your CRA account.

Doctors and nurse practitioners can certify any impairment. Other practitioners can certify the areas they work in: optometrists (vision), audiologists (hearing), occupational therapists (walking, feeding, dressing), physiotherapists (walking), psychologists (mental functions) and speech-language pathologists (speaking).

If your practitioner charges a fee, you pay it, but you may be able to claim it as a medical expense. You can apply at any time; applying before you file your return avoids a delay, because the CRA reviews the application before it assesses the return. If a family member will claim the credit, name them in Part A.

After the CRA decides

You get a notice of determination showing which years you’re approved for. Approval can be permanent or for a set period; if it has an expiry date, you’ll need to apply again. If you’re refused, you can ask for a review with new medical information, or file a formal objection within 90 days of the notice. If your condition improves so that you no longer meet the criteria, you must tell the CRA in writing.

Claiming and transferring

The person with the impairment claims the disability amount on their own return (line 31600). Anyone under 18 at the end of the year can also claim the supplement for children.

The unused part can go to a supporting family member: someone the person relies on for food, shelter or clothing who is their spouse or common-law partner, or a child, grandchild, parent, grandparent, brother, sister, aunt, uncle, niece or nephew of the person or of their spouse. A spouse claims it on line 32600; other relatives use line 31800. Two supporters can split the claim, as long as the total isn’t more than the maximum.

Claiming for past years

If you were eligible in earlier years, you may be able to claim the credit for up to 10 years back. Tick the box on the application asking the CRA to adjust your past returns, or ask later in writing or change the returns online yourself. This can lead to a refund.

In Quebec

Quebec has its own amount for a severe and prolonged impairment on the provincial return, for people 18 or older. You can usually send a copy of your federal Form T2201 instead of Quebec’s Certificate Respecting an Impairment (TP-752.0.14-V), but you must use the Quebec form if your claim is based on therapy to support a vital function.

What to do

1. Read the eligibility criteria for your category and talk to a practitioner who can certify it.
2. Apply before you file, digitally or on paper, and name any family member who may claim the credit.
3. Once approved, claim or transfer the amount, and look into the RDSP and other disability benefits.