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Disability Tax Credit: Are you missing out on this misunderstood tax credit?

Disability Tax Credit: Are you missing out on this misunderstood tax credit?

Though many are aware that the disability tax credit is available for those who suffer from a “severe or prolonged physical or mental impairment,” many taxpayers may not fully appreciate the scope of impairment included in this CRA definition.

The disability tax credit is not just for the severely disabled. That said, there are still strict criteria that must be met in order to qualify.

What is the Disability Tax Credit?

The disability tax credit or DTC is a non-refundable tax credit to help people cope with their disability. It is also designed to help supporters, such as parents, reduce the amount of income tax they must pay. There is also a supplement available for people under 18 years of age at the end of the year. The whole point of these tax credits is to provide a more level playing field by allowing some tax relief for costs associated with disabilities. These necessary expenses for the disabled or those supporting the disabled may be costs that most taxpayers do not face.

The amount of the federal disability tax credit is $8,113 for 2017, with a supplement of $4,732 for 2017 for taxpayers under 18 years of age. Provincially, the tax credit ranges from $6,058 to $14,417 depending on your province of residence.

The supplement is reduced when total child care and attendant care expenses claimed for the taxpayer under 18 exceed a threshold ranging from $4,884 to $5,722 in 2017 and eliminated completely when those expenses exceed $12,779 to $21,273 for 2017, depending on your province of residence.

This equates to about $1,600 for Ontario residents to about $2,600 if you reside in Alberta, in annual savings for the disability amount, and about $2,500 for Ontario residents to approximately $4,400 per year for residents of Alberta, when you include the supplement for taxpayers under the age of 18.

A bonus is that you may be entitled to retroactive tax credit refunds for up to 10 years if the disability existed in the past but you failed to apply for it. We have examples of clients who have been able to file for prior years, resulting in up to $25,000 in retroactive tax credit refunds. Interestingly, Form T2201 (referred to below), now makes it simple to apply for previous tax years to be automatically adjusted, so it doesn’t require any filing of adjustments to make the claim.

Related Article: Three D’s of Tax Planning

Who is eligible for the DTC?

You are eligible to receive the DTC once Form T2201 has been approved by the CRA. You will need to have a medical practitioner fill out this form and certify that you indeed have a severe and prolonged impairment with a description of how it affects activities of daily living. Effective March 22, 2017, a nurse practitioner can certify eligibility for the DTC for all types of impairments. Other medical practitioners that can certify in their respective fields include audiologists, occupational therapists, optometrists, physiotherapists, psychologists and speech-language pathologists.

The form is quite easy to complete and if the medical practitioner charges a fee to complete the form, that fee may be claimed as a medical expense. You may still want to speak with your tax professionals regarding your circumstances to get advice, but the completion of Form T2201 likely does not require assistance.

Eligibility for the DTC may include less apparent disabilities. According to the CRA, to qualify, you must meet one of the following criteria:

  • blindness
  • markedly restricted in at least one of the basic activities of daily living
  • significantly restricted in two or more of the basic activities of daily living
  • require life-sustaining therapy

The disability must also be prolonged and present at least 90% of the time.

Of course, every scenario is reviewed on a case by case basis by CRA to determine eligibility. However, some conditions that may qualify include:

  • Type 1 Diabetes
  • Learning disabilities such as ADHD, ADD and Autism
  • Cognitive disorders such as Dementia and Alzheimer’s
  • Severe hearing Loss – even with the use of a hearing aid
  • Crohn’s Disease
  • Epilepsy

Some may hesitate for fear that they will be labeled as “disabled,” but it is important to note that all claims and benefits for the DTC program remain confidential within the CRA. The CRA is bound by the Federal Privacy Act guidelines that prohibit them from disclosing your private income tax information with any other entity without your written consent.

Not sure if you qualify? It is best to speak with an experienced accountant to discuss your personal circumstances. There are also various companies that claim they will help you qualify to receive the Disability Tax Credit – however, “buyer beware” certainly applies here. Some of these companies have been charged with obtaining the refunds fraudulently, whereby taxpayers may end up repaying their refunds in the future if they are not legitimate. Please see the following article from the CBC.

It is best to be leery about companies that purport to assist with the application process in return for a percentage of the amount recovered. These kinds of companies are the pariah of the tax world and should be avoided at all costs. The better option is to either do it yourself or hire an accountant.

Related Article: Top Tax Credits for Canadians

Find out if you qualify

The bottom line is there is no harm to filing a T2201 Disability Tax Credit Certificate to see if you qualify. The worse that can happen is the CRA turns you down. On the other hand, if you do qualify, you may be in a position to save $1,600 to $2,500 per year, if you are a resident of Ontario, in addition to retroactive tax credit refunds going back up to 10 years. Besides that, being eligible for the disability tax credit may open the way to other federal and provincial/territorial programs such as the Registered Disability Savings Plan (RDSP), the working income tax benefit and the child disability benefit.

Comments

  1. Derrick

    Hi Nancy – good article. Can you please comment on how a parent will use the DTC for an dependent that is living at home and is over the age of 18? What can a parent claim on their tax return as a tax credit?

    • Nancy Grouni

      Thank you, Derrick. Per the 2017 Federal Budget, the new Canada caregiver tax credit replaces the infirm dependant tax credit effective 2017 onward. $6,883 may be claimed for the care of an infirm dependant relative such as an adult child, and $2,150 for an infirm dependent for whom the eligible dependent credit is claimed. Please note that the credit amount is reduced when a dependent’s net income exceeds $16,163. As always please consult with your accountant regarding tax planning matters

      • Nancy Grouni

        So if conditions are met, it may be possible for you to claim both CCC mentioned in my comment above, as well as the DTC. The DTC is claimable to the extent the dependent doesn’t need the full DTC claim themselves. The remaining DTC not used can be transferred to a supporting person. The math involved is disability amount – adjusted taxable income = maximum amount available for transfer. Hope this helps, Derrick!

      • Luanne

        Hi Nancy, thanks for writing the article. I have applied for the DTC two time’s and I’ve been turned down both times. The problem is that I have multiple health problems, not just one. The form does not allow a doctor to describe these problems. Should my doctor write a letter to go with the application? I use to work full time until I acquired Streptococcal Toxic Shock Syndrome, then Sepsis which resulted in a brain injury. With my brain injury I have chronic fatigue, ADHD, Tinnitus, IBS, depression, anxiety, sleeping difficulties and the regular brain injury characteristics. I take medication for ADHD, depression and anxiety, IBS and to sleep. I now work 2/3 and sometimes 1/3 of full time. Also, my doctor fired me in the Spring of last year, so I am going to a walk in clinic. They have been really helpful. Can the nurse fill out the form? Can I use documentation from my previous psychiatrist? Thank you in advance for your help. Good luck to everyone!

        • Brittany

          Hello, I’m wondering if I’m eligible for the disability tax credit. I have a severe mental health issues that leave me in capable of work I am on disability. I have psychosis, anxiety disorder, paranoid personality disorder, panic disorder, and major depression. Am I eligible?

    • Kathy DeKouchay

      What happens if you forget what year you had your doctor fill out the T2201 form .?? Also if you get ur tax’s done and you need this and don’t have it in time ,what happens

  2. Claude Mayrand

    Thanks, Nancy.

    I am becoming eligible for this tax credit as my hearing is becoming more and more impaired.

    I was not aware of this type of credit for hearing issues.

    • Nancy Grouni

      You’re welcome, Claude. I wish you success in applying for this credit.

  3. Susan Whalen

    At least ten years ago the Supreme Court ruled that FM/ME was an acceptable disability for purposes of the DTC. Please make certain patients and Medical personnel are aware of this change.

    • Dave

      You could help make us aware by telling us what FM/ME is.

      • sarah

        Fibromyalgia/Myalgic encephalomyelitis

        • John

          Hi nancy so im a single dad of 5. Im a stay at home dad with side work and recently had my 8 year old tested and came back with severe ADHD and intelectual learning disability. I was tokd to file a claim for the disability credit. And i was told because im not working i wont get anything for my son but yet they had on my file 240 a month. Does tjis mean they wont be depositing a lump sum cheque for his previous years

    • Nancy Grouni

      Thank you, Susan.

  4. Lawrie

    As a retired family physician I must let you know that these forms are a source of great frustration. They are very involved and can take up to an hour to properly complete. Therefore the patient should be prepared to pay a large amount, even tho they will be turned down !
    Why ? Because the disability must be severe and prolonged. You do not want to be able to qualify ! Despite what your accountant says .

    • Nancy Grouni

      Thank you for sharing your insights, Lawrie! Indeed, the goal we all have is excellent health.

  5. Don Goertzen

    I applied for the disability tax credit a couple of years ago and in the end I came out $18000 ahead.
    Yes a cheque for 18000.00
    I used one of the services that help you orchestrate the whole thing and yes there is a commission involved but I don’t think I would have been successful if I didn’t.
    Dealing with complicated forms ,uncooperative doctors and such.
    I have suffered from MS for 25 years and I continued to work up until I was 62.If you want to sell your house do you go at it your self or get a professional If you have investments do you go at it alone or get help from an advisor.Same with legal stuff. Go at it alone or get a Lawyer.My advise to those that choose to pursue the disability tax credit is talk to the people who specialise in orchestrating the whole thing.
    Worked for me
    Yes it cost a few bucks but everyone has to eat in the end

    • Dave

      My sister sent 60 pages of docs including the signed form for her disabled adult son to CRA. She has a postal receipt that they received them and they acknowledge receipt but say they lost them all in a move from Surrey BC…. to Winnipeg. They said they would get back to her but of course never did.

      • Janet Hammel

        Nancy. I have a question re when disability tax credit (DTC) has been approved and 10 years of retroactive payments. A friend received a letter of approval in 2018 approval for 10 years of retroactive DTC. I believe that he should be entitled to DTC retroactive payments back to 2008. Is this correct? I believe his DTC approval in 2018 does not include 2018 as a retroactive payment? Looking forward to hearing from you.

    • Nancy Grouni

      I’m sorry to hear about your disability, Don, but am very glad you were able to qualify. Thank you for sharing your experience.

      • Nancy Grouni

        Dave, I’m sorry to hear about your sister’s experience. I hope she can try again.

    • TJ

      Hi Dave,
      Would it be possible for you to share the lawyers name with me? Many thanks, YJ

      • Mary ann chantal gagne

        Hello,i have all my forms here ready to go but im wondering please for the credit i will pass on for the years i was not taxable,will my sister be penalised for the yeara she is going to get as my care giver? I know i can claim some years but the last 5 i have been on regular disability and cant apply for those years. She just wants to know if she is gijng to have to pay back taxes if she clai.s for me

  6. Bobby S

    As a physician, I find your comments frustrating. It is a simple matter for you to simply say get the form filled out and see if you qualify. I’m also not sure what the point is of asking your accountant if you qualify. In my experience most non physicians will simply refer the patient to their practitioner to try and get the form filled out regardless of whether they actually do qualify or not. Ultimately it is not CRA that decides but the physician or practitioner that fills out the form. If a patient presents with the form and does not qualify, I will not fill it out. Most patients and accountants do not understand what a severe disability that interferes with basic activities of daily living involves. Unfortunately most patience and accountants are misguided in what they feel qualifies for disability. I have no problems feeling this form out for somebody who truly deserves it. Most that present to my office with it do not. Those that feel physicians are being difficult are simply unfortunately individuals who have a false sense of entitlement.

    • Tovah Jacovit

      Patients and accountants can usually READ what constitutes acceptance for a DTC and if a patient feels a Doc is being difficult I’m confident after decades in medicine that some Docs ARE. It’s usually because they aren’t taking the time to listen, refer, test and Dx a patient correctly, NOT because the patient has a false sense of entitlement. Way to paint a population with one brush “Dr”. Perhaps that anger that is clearly coming through in your poorly worded rebuttal is due to your personal sense of false entitlement and lack of upholding our Oath because that comment of yours is certainly in the realm of harmful. If a Dr doesn’t believe in their patient, fire them. Stop taking that pay check for their appointments that you clearly do not care about. If you feel THAT strongly about patients coming to you with a form that requires an hour of your time to change their life and you believe your MD is really a GOD, perhaps it’s you that needs to find a different vocation or find a way to get your compassion and humanity back because you are clearly in the wrong field. Agreed those forms take time but would you take that much time to treat an oncology patient if it could save their life? That oh so terrible form can absolutely be LIFE CHANGING for a patient but hey, what does a few extra grand matter to a high income earner, right? I wish I knew who you were so the College could see who they allow near patients (real live humans with actual feelings, remember those from when you were a lowly resident?) with a swipe of a pen. Shame on you “Doctor”. You’ve clearly lost your way. Have you thought about becoming a coroner? I hear the patients are far less demanding and have zero sense of entitlement.

  7. Dave

    My friend has Wet Macular Degeneration – very poor and worsening vision, and as a result of this article I will suggest this to her.

    I also went to the CRA site and it sets out the definition – specs of what is a vison disability. She is seeing a specialist and gets shots in her eyes, but I see from the CRA site that for vision – an optometrist is also qualified to sign these forms.

    Several years ago my mother-in-law developed dementia and was in care. We got the form signed by her doctor and it was accepted by CRA. Important to note that once accepted you do not have to reapply.

    • Nancy Grouni

      I’m glad you are able to help your friend and also mother in law. Nurse practitioners are now also able to certify form T2201 as per the 2017 Federal Budget. Thank you for sharing your experiences, Dave.

  8. Nancy Grouni

    Please be assured that the intent of the article was not to frustrate physicians or to oversimplify the DTC application process. Rather the intention was to raise awareness that this credit exists for those with a severe and prolonged physical or mental impairment. The article also stated that each scenario is reviewed on a case by case basis. Thank you for sharing your thoughts, Bobby.

  9. Jackie

    In my opinion my husband definitely qualifies for this tax credit. I had the GP complete the forms today. My question is, what address do I send the completed T2201 to? We reside in Ottawa.

  10. Nancy Grouni

    Sounds good, Jackie. As a matter of fact, there have been some recent tax office adjustments and residents of Ottawa are now to send their form to the Sudbury office, (formerly it was the Quebec tax centre). The address is: Sudbury Tax Centre, P.O. Box 20000, Station A, Sudbury ON P3A 5C1.

    • Jackie

      Nancy, thank you very much for this information. Good to know and I will be sending the forms to this address first thing.

  11. Raymond

    You do not need a doctor to fill out the form . A liscenced nurse pracctioner can do this.

  12. Trish

    Once qualified, you do not need to reapply from scratch but you do have to have a form filled out and signed by the practitioner every 5 years to confirm the disability still exists.

  13. pat.fraser

    what are the chances for me…have had PTSD,Major Depression,Arthritis, but the tax credit was ended in 2016 b/c ortho doc said my double knee replacements and 2 revision surgeries were no longer an impairment. i can not walk without a device betond 50 feet, am incontinent…my own doc supports my situation

  14. ken

    I was qualified for the tax credit not proud of it. I can go back 10 years my question is who will do the taxes for me. its not the Canadian government that will take month and the provincial is sending me documents to fix the 10 years. i need accounted for this and it will cost money so i’m still in the same boat no money so the money that i get back i have to pay accountant you dont think this is a scamm ive been seeing so many articles about this tax refund and you got all sorts of people on the internet ready and waiting to take your tax return what fucking scamm

    • Teresa

      Once you are approved by the CRA, they do the adjustments 10 years back. I work with disabled individuals. I submitted the form to the CRA for 2 individuals, received letters that they were accepted and then I started receiving Notice of Re-assessment forms for 2017 and 10 previous years.

      • Kay

        Are you still assisting with thus process? If so is there a contact # for you.

  15. Petal

    I am still in my 30s, and I decided to ask my doc to fill out the form for me as I have a number of health problems including type 1 diabetes. I have had the form for months now but I have not submitted the form to the CRA. I am wondering what are some possible drawbacks to sending the form in, especially if they decide I am eligible? I wouldn’t want my employment, driving, mortgage etc to be negatively impacted down the line if I am id as ‘disabled’ by the governemnt. What are the cons to taking advantage of this credit?

  16. Michael

    Have a question maybe someone will help me.
    I’m a immigrant of Canada a Filipino a undergo angioplasty due to coronary hearth disease done in my country right after Being a permanent residence and I haven’t work here in Canada … will I qualify DTC
    Thanks
    Michael

  17. Tara Lynne SMITH-RAMJEWAN

    I care full time for my son who was born with Down syndrome in August 1993. He suffers from a multitude of ailments from birth such as hearing loss, eyesight impairment, etc. till just more recently he’s in the early stages of Alzheimer’s. I was only made aware of the DTC this year, 2019. I’m unclear if it’s a “Tax Credit” per say or if it’s only applicable as a deduction for those who pay taxes to reduce the amount they owe. I, myself have an acquired brain injury since 2000, before this occurred I worked 2-3 jobs at a time, however, I had to rely on welfare to subsidize my daycare, medical,etc… costs. I’ve been on O.D.S.P. &. C.P.P. since 2002, so I guess my question is am I eligible to claim this as a tax credit even though I receive a refund each year as most low income people do. If so, do I claim for my son as his primary caregiver as well as myself having an A.T.B.I.?
    I’d really appreciate your assistance in clarifying these issues as I spoke with an agent with tax revenue and he wouldn’t clarify the above questions I had. Rather, just said I was eligible and to get a form filled out from my doctor. He wouldn’t tell me the difference if it’s a benefit, credit, or deduction.
    Best regards,
    Ms. Tara Smith

    • Michelle segade

      I’m in a similar position and have the exact same questions. I’m hoping some one will answer this clearly for us. 😊

  18. Ms.tara smith

    I care full time for my son who was born with Down syndrome in August 1993. He suffers from a multitude of ailments from birth such as hearing loss, eyesight impairment, etc. till just more recently he’s in the early stages of Alzheimer’s. I was only made aware of the DTC this year, 2019. I’m unclear if it’s a “Tax Credit” per say or if it’s only applicable as a deduction for those who pay taxes to reduce the amount they owe. I, myself have an acquired brain injury since 2000, before this occurred I worked 2-3 jobs at a time, however, I had to rely on welfare to subsidize my daycare, medical,etc… costs. I’ve been on O.D.S.P. &. C.P.P. since 2002, so I guess my question is am I eligible to claim this as a tax credit even though I receive a refund each year as most low income people do. If so, do I claim for my son as his primary caregiver as well as myself having an A.T.B.I.?
    I’d really appreciate your assistance in clarifying these issues as I spoke with an agent with tax revenue and he wouldn’t clarify the above questions I had. Rather, just said I was eligible and to get a form filled out from my doctor. He wouldn’t tell me the difference if it’s a benefit, credit, or deduction.
    Best regards,

  19. Naddly

    I believe you only get a credit and you do not get a refund if you have not paid any taxes (i.e. very low income).

  20. Michelle Anderson

    Unfortunately my 13yr old daughter has just been diagnosed with a bad form of Juvenile Arthritis. She has complained of aches and pains for years, but we just assumed it was ‘growing pains’ As symptoms got worse we started seeing her doctor, beginning of 2018. By this time her knee was very swollen and so was her foot. After a few months of different tests we were referred to a Pediatric Rheumatologist in Saskatoon, who recently diagnosed her with ERA. Her arthritis is quite bad and she has a lot of trouble walking and dressing and always needs my assistance. She has not responded well to treatment so far.
    Anyway, my doctor was more than happy to complete the Disability Certificate, however she put down that symptoms started 2018, as this is when we starting seeing her. My daughter first complained of pain in her foot Halloween of 2016 and we noted that she had a lump on the side of her foot in 2017. We saw a doctor at a walk in clinic in 2017 and we were told it was nothing to worry about, but we have not documented evidence of this.
    How would we go about claiming the disability credit for 2017 also, as this was when symptoms first appeared?

  21. An

    If one does not have taxable income( ie, is living on provincial disability monthly support) is there any benefit to applying for this?

  22. Sabban

    Hi my name is sabban I would like to know I had a kids with autism and we are in low income family.i m the house wife and my husband only work.end of the year when we file are tax we don’t pay anything to the government.my question Is we are still able to claim for dtc because when I check on my cra account it shows u are entitled to claim dtc for your kids but when I asked my accountant he said u can’t get that because u r not pay tax but last time when I visit the doctor who diagnose my kids with autism she said that’s not the case as long as u file tax return U will get those credit in your account..

  23. Josh

    Would you happen to know if people who havent worked in the past ten years can receive this credit? Because I have been unemployed my whole life because of my disability.

  24. Ronald

    Hi. I’m wondering if I am receiving a transferred DTC due to a parents disability if I can also claim a dtc for myself as I too have realized that I personably qualify. In short, does CRA restrict the number of disability tax credits an individual can use if that person is disabled and dependents are too?

  25. Toni

    Hi, I am wondering if I can receive the caregiver tax credit? My parents are 91 and almost 86 years of age. Neither are able to drive. I do all the grocery shopping for them, take them to the doctors and blood clients. I sometimes make their meals. I help take care of the outside of their home also. I have been doing this for 3 years now since I retired. Can my other siblings also qualify?

  26. Doris

    After two denials a consultation firm was hired….The application was finally accepted. Yes it cost 25% however I had zero. Some $ is better than none!
    Is the disability consultant fees tax deductible in Ontario under medical expenses as they dealt with and paid the medicals directly. Thank you

  27. marlene hahn

    My application has been accepted but nowhere in all he paperwok all across the internet is there anyway I can fine out how much I will receive it and when…

  28. Troy Delamare

    Can u send me a paper copy of the disability tax credit forms….or send me a phone number to the person that can walk me through the questions to complete the prosses to recieve the refund money…………

  29. Ellen

    Thank you for your post. How do I actually start my comments in the box where it says to give details about the regular and consistent support?
    Are they wanting a list or a paragraph?
    Is it only food, clothing, shelter?
    I take care of my 90 year old dad who has been incontinent for 10 years after a series of strokes. He has become very combative in the last 1-2 years and goes through many products. Are incontinence products part of clothing or is there no consideration for that? Thank you for any help you can provide. I feel exhaustion and writer’s block.

  30. Marshall

    Will my dtc cover any money owing example I didn’t take enough tax off my cpp I owe $2500 dollars

  31. Nancy M

    Hi : is their an actual phone number I can call to talk to a human that will not put me on hold for 2 hrs. I just want to know where to send my forms to. Can I Scan the Dr forms and mine so they get there sooner or do I have to send original forms. I live in ALDERGROVE. My way of photo coping these forms that are attached to one another’s and hard to photo copy. Also my dr back datedcforms from 2020 to 2015. Should I have an acct go over all my forms since 2015? Thankyou

  32. Alexandra Byrd

    That comment from that Doctor was terrible. Thankfully, he was set straight quite fast! Haha gold. Anyways, Ive been suffering with chronic idiopathic urticaria (chronic hives) on my palms and bottoms and sides of both feet for 12 years. Most days when I get a bad outbreak I cannot walk due to the swelling and pain so I hobble around like a 90 yr old. Im 36. Besides the pain and swelling, the severe itch is enough to bring me to tears. My doc straight up laughed at me when I brought him disability papers. Time to switch doctors.. my question is, do I stand a chance at applying for the disability tax credit? My condition is prolonged, and severe. Thank you

  33. Dawn

    Thank you for your insight Nancy. My daughter does qualify for the DTC and has an RDSP. However, despite the fact that her disability had been present for ten years prior to diagnosis we were unable to qualify for any refund because I had separated from her father. My individual income from those years precluded any refund. Her father was the only income earner as I was home looking after her. I believe it is possible to transfer the unused portion of the DTC to him and hope that it will be used for her future. Is there a way of transferring this? Also, would a legal agreement that he will release the funds due from taxation hold up? Or would he be able to keep the funding for himself? Lots of difficult questions, I know. Possibly you could point me to an accountant who could help. We are in London, Ontario. Thank you for any guidance that you can offer.

  34. William Robert Companion

    Had my shoulder operated on 1977 and I have had limited use ever since.

  35. Vega Govro

    Hello Nancy
    My husband had a stroke and we are getting help in the morning. My question is, how is the disability tax credit calculated ? Is it as a family income or the income of the disabled person?
    Would appreciate if you could answer it .Thanks

  36. jessica

    so if I never had to pay for taxes because I never worked in my life, but submitted the disability tax credit doctor form and ended up being eligible for 7-8 years because of brain injury and spinal cord injury that happened in 2012. what kind of refund will I receive if any? or does it mean I have to start paying taxes to get the credit?

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