Should you be applying for the Disability Tax Credit?
If you or someone you support suffers from a severe, prolonged impairment, the Government of Canada acknowledges you will be impacted by additional costs and may grant eligibility for a tax credit to reduce the amount of tax you pay. This credit is called the Disability Tax Credit (DTC). Eligibility for the DTC can also provide access to other federal, provincial/territorial programs such as the Registered Disability Savings Plan, the Working Income Tax Benefit and the Child Disability Benefit.
Who is eligible?
The person applying for the DTC must meet at least one of the following criteria (source: CRA):
- be blind
- be markedly restricted in at least one of the basic activities of daily living
- be significantly restricted in two or more or the basic activities of daily living (can include a vision impairment)
- need life-sustaining therapy
In addition, the person’s impairment must meet all of the following criteria:
- be prolonged, which means the impairment has lasted, or is expected to last for a continuous period of at least 12 months
- be present all or substantially all the time (at least 90% of the time)
How to apply
To apply for the credit, your medical practitioner must fill in Form T2201, Disability Tax Credit Certificate. If the medical practitioner charges fees for this service, you may be able to claim them as medical expenses on your tax return.
Before you visit the medical practitioner, you will fill in Part A of the form. In Section 3 you will be asked if you want CRA to adjust your tax returns and you can answer “yes”. If you are approved for the DTC and you selected yes in Section 3, Canada Revenue Agency will apply the credit to all years that apply for up to the 10 previous years.
Keep us posted
If you think the DTC applies to you, let us know right away. We’ll be able to advise you on how to get started and what impact the credit will have on you.
The information in this commentary is for informational purposes only and not meant to be personalized financial planning advice. The content has been prepared by the team at Fraser & Partners from sources believed to be accurate.