Considered as a non-refundable tax credit to help the people with disabilities in Canada, the Disability Tax Credit in Canada aims to support such people by reducing their tax liability. Once eligible for Disability Tax Credit (DTC), the person is eligible to claim the specified amount.

With the lump sum of $25,000 and $ 2500 per year including the future as well as current taxes, these refunds are considered important for the people suffering from specified medical conditions.

If you want to know more about Canada Disability Tax Credit (DTC), this article is for you!

Who can claim the disability tax credit in Canada?

If you are suffering from a prolonged physical impairment or distorted mental functions with a lasting continuous period of at least 12 months and present for at least 90% of during such time, you are eligible to claim the disability tax credit Canada.

Some of the categories for individual impairments are as follows:

• Walking
• Speaking
• Vision
• Dressing
• Elimination of crucial body functions such as bladder or bowel
• Hearing
• Distorted mental functions
• A person availing life-sustaining therapy

Even if an individual with the impairment is having a job, he qualifies for the disability tax credit. The impairment obstructing the daily activities (as listed above) does not include housekeeping, working, social functions, or recreation.

The impairment along with its duration and side-effects should be certified by a qualified medical practitioner. All the charges incurred to certify by a medical practitioner can be claimed as medical expenses in your income tax on lines 330 and 331.

How do I apply for a disability tax credit in Canada?

To apply for a disability tax credit in Canada, you must complete and submit the certified form T2201 and Disability Tax Credit Certificate to the Canada Revenue Agency (CRA). Log in to the CRA website to get the T2201 certificate. Part B of the form must be completed and certified by a medical practitioner.

Steps to apply for a disability tax credit in Canada

• Download the form T2201 from the CRA website
• Complete Part A mentioned in the form
• Get the part B completed by a certified medical practitioner
• Submit the form, once completed to the CRA.

Who qualifies for disability credit?

The people with more than 90% of physical or mental impairment which is duly certified by the medical practitioner and are suffering from more than 12 months qualified for the disability tax credit. They must be incompetent to perform two or more basic daily activities.

Some of the medical conditions which qualify for disability credit are as follows:

• Limited upper body mobility
• Slowed walking due to foot disorder, hip/knee issue, Osteoarthritis, poor circulation
• Cognitive issues like Alzheimer, Depression, Memory Loss, etc
• Digestion disorders due to inflammatory bowel disorder, prostate, etc
• Breathing disorders like Chronic Asthma, COPD, Tuberculosis, etc
• Hearing impairment like poor hearing and need for hearing aids.

How much is the disability tax credit for 2021?

The non-refundable DTC is prescribed at $8,416 for an adult. An additional supplement of $5,003 is given to the child under the age of 8 leading to a total of $13,416.

Conclusion

If you are a citizen of Canada and suffering from any disability, you may consider the disability tax credit to receive the refund for the specified amount. It can also be claimed for your dependents under various inline sections.

Still, have a question? Feel free to reach out to Filing Taxes at 416-479-8532

Canada Disability Tax Credit (DTC) is a non-refundable credit that can be used to reduce your taxes owed. The Disabled Tax Credit is available to people with severe or persistent physical or mental impairment. Therefore, depending on the situation, you can claim this credit for yourself or on behalf of your loved one.

How to apply for the Disability Tax Credit?

• You can claim the disability tax credit for yourself, your spouse, child, or common-law partner.
• To apply, either a legal representative or a person with a disability must fill out Part A of Form T2201. For instance, if you are applying for the DTC on behalf of your spouse. You may act as the legal representative and fill out Part A of the form.
• A medical specialist is needed to fill out Part B of the form. Based on the type of impairment, a medical doctor, an occupational therapist, a psychologist may complete the second portion.
• Once the form is completed, you can mail it to your nearest tax center.

There are a list of medical conditions that qualify for the disability tax credit

If you are having any difficulty in speaking, hearing, walking, feeding yourself, or some other severe ailment that affects your day-to-day living, then you have a chance of being qualified.

Some of the conditions include:

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

How to understand the DTC estimation process?

After Form T2201 is received by the Canada Revenue Agency (CRA), then it will estimate the validity of your claim.

• If you are entitled to do so, you will receive a notification from the rating agency with the years in which you can claim the DTC. After the specified time has elapsed. Later, you will need to apply again if you want to proceed with the DTC request.
• If the CRA agency does not approve your request, you can collect additional information from qualified doctors. Then send it to the rating agency and request a further review. However, you can submit a formal objection within three months of sending your confirmation message by the rating agency.

What other benefits can you be eligible for?

1. The Family Caregiver Amount Tax Credit: If you have an adult or child with a severe physical or mental disability, you could be qualified for this tax credit. 
2. Canada Pension Plan(CPP) Disability Pension: This is a taxable monthly payment available to those who have contributed to the CPP but cannot work due to their disability.
3. CPP Post Retirement Disability Benefit: A monthly benefit for people who have contributed to CPP but are under 65 years of age and can’t work because of their disability. 
4. Children’s CPP Benefit: This is a monthly benefit for dependent children of someone who is obtaining a CPP disability benefit. 
5. Registered Disability Savings Plan (RDSP): A savings plan that helps you save for long-term financial well-being for someone who’s qualified for the DTC.
6. Canada Disability Savings Bond: If you’re receiving the RDSP, you may be qualified for a savings bond of up to $1,000 a year, based on your family income. 
7. Medical Expenses Tax Credit: You can claim some medical expenses applicable to the disability you have.

How to claim the DTC for Previous Years?

If the rating agency decides that you are eligible for the DTC in previous tax years, you can submit it for that credit. You can also do this by submitting Form T1-ADJ by mail or through your CRA account. The rating agency will then review your adjustment requests and send you the refunds due.

How to claim the DTC for Yourself?

• If you are eligible for the disability tax credit, you may be able to claim the disability amount of $8,416 on line 31600 of your Schedule 1.
• If you qualify for the disability amount and are under 18 years of age. Then you can claim up to an additional credit of up to $4,909 or a total credit of up to $13,325.
• Although eligible for these supplemental credits, no one must have claimed child care or attendant care expenses for you. Your supplemental credit can also be decreased. If you claim attendant care expenses on your return.

How to claim the DTC for a Dependent?

• If a person is dependent on you for basic needs but is not your spouse or common-law partner, you can claim a portion or all of their DTC. To be eligible, the individual must be the child, parent, grandparent, grandchild, sister, brother, uncle, aunt, nephew, or niece of either yourself or your spouse or common-law partner.
• If you support a dependent and he/ she does not fall into one of these categories, you can claim a portion of their DTC. Your qualification to claim their DTC is based on whether you claimed a dependent amount for that person on line 305 or claimed that amount if you did not have a spouse or common-law partner.
• To claim a portion or all of a qualifying dependent DTC, you can enter the amount not claimed by the dependent on line 31800 of your Schedule 1. Remember to note down the dependent’s name, relationship to you, and social insurance number. Then only the CRA can mention both returns.

Can a learning disability approve for the DTC?

A person with a learning disability may be eligible, but it all depends on the severity of the disability and how it affects daily life. For approval, even you can work with your healthcare professional to develop the strongest case for the difficulties you face living with a learning disability.

Even, you can rate your DTC in My CRA Account. To subscribe to the CRA's "My Account" online service, you must provide your social security number, date of birth, current postcode, and information from your most recent tax return to prove your identity. Hence, you get the approval for the DTC.

For more details, you can call us or visit our website if you want to know about Disability Tax Credit in Canada.