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How COVID-19 Government Updates Affect You & Your Taxes
January 3, 2021
What is The Canada Disability Tax Credit

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.

Salman Rundhawa
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

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