Disability Tax Credit

Depending on which province you reside in, there are several government incentives one can have access to. Ontario is one of the provinces which offers a tax credit for those who qualify. The Disability Tax Credit (DTC) is a non-refundable tax credit that is available to persons with disabilities or supporting individuals that helps reduce the amount of income tax they may have to pay. What is the purpose of the Disability Tax Credit? It offers a bigger tax incentive and provides consolation for certain expenses individuals with a disability incur, which others may not. There are different eligibility guidelines outlined to clarify who qualifies for the DTC.

To apply for the DTC, a medical practitioner must complete the T2201 - Disability Tax Credit Certificate form verifying the medical condition of the applicant. Certain categories will determine the eligibility, varying on physical or mental functions of the individual. The eligibility for the DTC can fall under the below categories:

  • Vision
  • Speaking
  • Hearing
  • Walking
  • Feeding
  • Dressing
  • Mental Functions Necessary for Everyday Life
  • Life-Sustaining Therapy

Certain marked restrictions indicate that the individual applying requires additional time with daily activities and functions, such as dressing, eating, or any physical excursions. There are some impairments which are considered severe and prolonged. Severe conditions for the DTC category specifies that the individuals impairment limits their ability to complete certain daily activities at least 90% of the time. In comparison, the other category listed as prolonged is described as one’s condition that is ongoing for 12 months or more. Further information regarding the eligibility requirements for the DTC are listed on the Government of Canada site. Additional details are listed on the certain conditions, as well as examples of scenarios where one may or may not qualify for the credit.

To proceed with the application, once the the medical professional and individual each completed their section of the form, it then gets submitted online or with the tax return. Canada Revenue Agency (CRA) will then review the application. Should any further information be required, the CRA will either contact the applicant or the medical professional. A final decision will then be made, either approving or declining the application. If the application is approved, the individual can then claim the disability amount on their tax return. A key note to be aware of, is should the applicant be eligible for the Disability Tax Credit in prior years but did not apply in the past, they can claim the adjustment up to 10 years in the past, under the CRA’s Taxpayer Relief Provision.

To confirm further qualifications for the DTC, the Government of Canada’s site offers a self-assessment questionnaire one can complete to determine the possible eligibility. However, this is not a guaranteed tool and confirmation is not provided until the application is reviewed by the CRA. Initially, this incentive can also open doors to further programs available, such as the disability savings plan, Canada workers benefit, and the child disability benefit. Should any further information be required, one can look online through the website, or they can also speak with an accountant who has understanding of the Disability Tax Credit