The Disability Tax Credit (DTC) is a non-refundable tax credit designed to help individuals with disabilities, or their supporting family members, reduce the amount of income tax they owe. It recognizes the additional costs associated with living with a disability.
Key Features:
- Tax Relief: Reduces taxable income for eligible individuals or their caregivers.
- Eligibility Gateway: Qualifying for the DTC can make you eligible for other federal, provincial, or territorial programs, such as the Registered Disability Savings Plan (RDSP).
- Transferable Credit: If the person with a disability has little or no taxable income, unused portions of the credit can be transferred to a supporting family member.
Who is Eligible?
To qualify for the DTC, you must:
- Have a severe and prolonged impairment in physical or mental functioning.
- Meet the conditions described in specific areas, such as:
- Vision
- Speaking
- Hearing
- Walking
- Elimination (bowel or bladder functions)
- Feeding
- Dressing
- Mental functions necessary for everyday life
- Life-sustaining therapy requirements (at least 14 hours per week)
A medical practitioner must certify your condition using Form T2201: Disability Tax Credit Certificate.
Key Criteria:
- Severe Impairment: Substantial restriction in one or more areas of daily life.
- Prolonged Impairment: Must last, or be expected to last, for at least 12 months.
How Much is the DTC Worth?
The DTC amount is indexed annually for inflation. For 2025, the amounts are:
- Federal Base Amount: $8,942
- Federal Supplement for Individuals Under 18: $5,985 (reduced by $1 for every $2 of family net income over $39,826)
These amounts can vary at the provincial or territorial level, offering additional tax relief.
How to Apply
- Obtain Form T2201: Download it from the Canada Revenue Agency (CRA) website or request a paper copy.
- Complete the Form:
- Part A: Completed by the applicant or their representative.
- Part B: Completed by a qualified medical practitioner.
- Submit the Form:
- By mail to your tax centre.
- Electronically through CRA’s secure online portal if your practitioner offers this service.
- Wait for CRA’s Decision: Processing times may vary.
Benefits of the DTC
- Tax Savings: Reduce federal and provincial income taxes.
- Access to Other Programs:
- Registered Disability Savings Plan (RDSP): A savings plan with matching government contributions.
- Child Disability Benefit (CDB): For families of children under 18 with disabilities.
- Retroactive Claims: You may claim the DTC retroactively for up to 10 years if you were eligible but did not apply in prior years.
Supporting Documents
Ensure the medical practitioner provides clear, detailed explanations of how the disability affects daily life. Incomplete or vague applications may delay approval.
Frequently Asked Questions
Q: Can I apply for the DTC for a child with a disability?
A: Yes, parents or guardians can apply on behalf of their child. Unused credits can be transferred to a supporting parent.
Q: How long does DTC approval last?
A: Approval can be for a specific period (temporary conditions) or indefinite (permanent disabilities). Renewal may be required.
Q: What happens if my application is denied?
A: You can request a review or appeal the CRA’s decision by providing additional supporting documentation.
