What is the Disability Tax Credit (DTC)?

According to the Canada Revenue Agency, the “DTC” is a non-refundable tax credit that aims to lessen the amount of income tax owed for recipients (and their supporters) with disabilities for parents of children with disabilities. The DTC is broken down into both provincial and federal amounts, and while the federal portion is the same for every eligible Canadian, the provincial amount varies considerably between provinces. If you’re a parent of a child under 18 with a disability, you may also be entitled to a supplementary amount called the “Child Disability Benefit”, which is a tax-free monthly payment.

Qualifying For The DTC

This can be tricky, and the qualifications have been scrutinized by medical professionals over the years. In fact, even if you are receiving other types of disability compensation (CPP or workers compensation, for example) it doesn’t necessarily mean you’ll qualify for the DTC. This can lead to a lot of confusion. Generally speaking, you may qualify for the DTC if you are living with a prolonged and/or severe mental or physical disability that makes daily living difficult or prevents you from working.

Medical Conditions That Qualify for Disability Tax Credit

If you have difficulty hearing, speaking, walking, feeding yourself, or some other serious ailment that affects day-to-day living, then you have a decent chance at being approved. It’s hard to find an “approved list” of conditions online, but some legal websites have included conditions that generally are most recognized as “most likely” to be approved. Some of the conditions include:

• Addictions
• Crohn’s Disease
• Mania
• Alzheimer’s Disease
• Dementia
• Multiple Sclerosis
• Amyotrophic Lateral
• Depression
• Parkinson’s Disease
• Autism
• Diabetes
• Post-Traumatic Stress
• Bipolar Disorder
• Downs Syndrome
• Psychosis
• Blindness
• Eating Difficulties
• Schizophrenia
• Borderline Personality Disorder
• Epilepsy
• Sclerosis
• Cerebral Palsy
• Fetal Alcohol Syndrome
• Seizure Disorder
• Colitis
• Hearing Disorder
• Stroke

Learning Disabilities And The DTC

Learning disabilities may qualify, but it all depends on the severity of the disability and whether-or-not it interferes with daily living. To have the best chance at being approved, work with your doctor or medical practitioner to build the strongest case for illustrating the difficulty that your learning disability has on your life.g the difficulty that your learning disability has on your life.

Disability Tax Credit Amounts

If you get approved, the DTC will include the year (or years) you can claim the DTC on your taxes. The maximum federal amount for 2024 is $9,428, and the maximum supplement for children under 18 is $5,578. The child supplement is in addition to the Canada Child Benefit, not in replacement, so make sure you’re utilizing both. The good news is that you can claim the credit retroactively, up to 10 years under the CRA’s Taxpayer Relief Provision. To do so, you’ll need to request a T1 adjustment. According to the CRA, you can claim the amount on your return as soon as you (or the person you’re caring for) becomes eligible.

• To claim the disability amount for yourself, see line 316 on your tax return.
• To claim the disability amount for your dependant, see line 318.
• To claim the disability amount for your spouse or common-law partner, see line 326.

The provincial amounts for the DTC vary. Below is a table of the different amounts available by region (does not include dependant amounts). Some are straightforward, while others require further calculation. Here are the amounts for the provincial and territorial programs. 

Applying For The Disability Tax Credit - the t2201 form

You can apply for the DTC by filling out the t2201 form and submitting the application to the Canada Revenue Agency. As mentioned, a medical practitioner must certify that you have a severe impairment of physical or mental functions. After your application is reviewed, you will be informed of the CRA’s decision with a notice of determination. If your child has a disability, you can also get the disability benefit. However, it’s important to note that eligibility for this credit does expire, so it’s important to keep your application up to date. 

When you’re applying for the Disability Tax Credit, you can apply for prior years; it doesn’t just have to be for the current tax year when tax filing. That said, when applying for years prior, the CRA may request further information to prove the length of the disability. This is because the time spent on the DTC is different for each applicant. This credit is intended to help cover the costs related to your disability, so it’s not applicable for life to everyone. 

Claiming The Disability Tax Credit On Your Taxes

When it comes to claiming your disability tax credit in Canada, you do have to have a disability tax credit certificate. This means that your application has to be approved before you can claim it. Once you have that, though, it will be registered with the government. You can then claim it if you file it yourself or provide the detailed information to a tax professional who can file it for you. 

If your taxes are due and you have to file for the current tax year but haven't completed the application process yet, then you can’t claim it in this year's taxes. However, you can claim up to 10 years previously for this credit. This means that you can refile your taxes after you receive your DTC certificate. 

Other Benefits You’re Eligible For

• The Family Caregiver Amount Tax Credit: If you have a dependant (adult or child) with a serious physical or mental disability, you could be eligible for this tax credit.
• CPP Disability Pension: A taxable monthly payment that is available to people who have contributed to the CPP but can’t work due to their disability.
• CPP Post Retirement Disability Benefit: A monthly benefit for those who have contributed to CPP but are under 65 and can’t work because of their disability.
• Children’s CPP Benefit: A monthly benefit for dependent children (under 18 or between 18 and 25 if in school full time) of someone who is receiving a CPP disability benefit (listed above).
• Registered Disability Savings Plan (RDSP): A savings plan that helps you save for long-term financial well-being for someone who’s eligible for the DTC.
• Canada Disability Savings Bond: If you’re receiving the RDSP, you may be eligible for a savings bond of up to $1,000 a year, depending on your family income. Lifetime benefit is $20,000.
• Canada Disability Savings Grant: A grant that pays into your RDSP and matches up to 300% depending on income. The maximum annual amount is $3,500 per year with a $70,000 lifetime amount.
• Medical Expenses Tax Credit: You may be able to claim some medical expenses relevant to the disability you have, or for a dependant.

Final Thoughts

If you’re seen as having a disability, the disability tax credit can help with some of these disability costs. This credit is meant for Canadians living with a permanent disability or needing life-sustaining therapy. That said, in order to qualify, you do need to meet the eligibility criteria and request the requested documentation from a health care practitioner or your family doctor. 

People living with these barriers can have a hard time accessing the equipment and funds needed to help them with daily life. The DTC allows more individuals to escape poverty while still affording the devices and medication they need. You can even advocate for clients, patients or someone in your care and help them.