Disability Tax Credit

The disability tax credit (DTC) is a non-refundable tax credit that helps individuals with physical or mental impairments reduce the amount of income tax they pay.

What is the disability tax credit

The disability tax credit (DTC) is a non-refundable tax credit that helps individuals with physical or mental impairments reduce the amount of income tax they pay. Individuals supporting someone with a disability or the spouse of those with a disability can also qualify for the credit. The credit is available at both the federal and provincial levels. In addition to potentially savings at income tax time, qualifying for the DTC can also allow individuals to take advantage of other complementary government programs, which include:
  • Registered Disability Savings Plan (RDSP)
  • Child disability benefit
  • Canada worker’s benefit disability supplement
  • Multigenerational home renovation tax credit.

Eligibility

To be eligible a person must meet the following three criteria:
  • Must have a severe impairment in physical or mental functions.
  • The impairment must be prolonged, meaning, it must have lasted or is expected to last, for a continuous period of at least 12 months.
  • Must be restricted at least 90% of the time.

Eligibility for the DTC is based on the effects of an impairment, not a diagnosis or the presence of a medical condition.

Type 2 diabetes are automatically approved for the DTC.

How to apply for the disability tax credit

To apply for the DTC, you’ll need to complete Form T2201. The first section of the form (Part A) is for you to fill out with your personal information. Your medical practitioner must complete the second section (Part B). The latter is the most critical, as the medical expert must prove that your disability is severe and hampers your ability to engage in day-to-day activities. You can mail this form to the CRA or submit it online using the “Submit Documents” function in your CRA My Account.

When approved, watch for start and possible end dates.