Suppose you haven’t claimed your disability tax credit till now. In that case, you are missing out on a major financial relief supported by the Canadian government and the Canada Revenue Agency for you. You might wonder if you qualify for the tax credit or not. What is it actually? And how to claim it!
If you have such queries in mind, this comprehensive blog is for you. We’ve covered everything from the purpose of DTC to the complete application process. Give it a read, find out if you are eligible to claim it, and fill out the form to get your tax credit for 2025.
What Is The Disability Tax Credit (DTC) And Its Purpose?
DTC is basically a non-refundable tax credit provided annually for disabled individuals in Canada both federally and provincially. Whether it’s you or your loved family member and relatives, anyone falling in the disability tax credit eligibility criteria can claim it.
The purpose of DTC is to support the citizens of Canada with disabilities that hinder their daily life activities. It’s to ensure a sense of relief and financial support for such individuals.
The disability tax credit is similar for everyone federally, however, may vary across each province. As every province has its own set regulations for the DTC, it’s recommended to stay updated on your province’s terms for the disability tax credit
Who Is Eligible For The Disability Tax Credit?
According to the CRA, disability tax credit requirements include a proven record of either a physical or mental disability that hinders your daily life activities. It includes walking, talking, hearing, dressing, eating, vision, bladder functions etc.
Find out the detailed eligibility criteria with video descriptions based on the Canada Revenue Agency.
What if I have a cumulative effect of 2 or more categories?
If it happens to be a situation where you are not completely falling into any of the mentioned categories, you are still eligible for the DTC if the cumulative effect of both categories is equivalent to any one category. Disability categories that qualify for DTC are:
- Walking
- Talking
- Dressing
- Mental functioning (memory, thinking, reasoning, etc)
- Hearing
- Speaking
- Feeding
- Lower bowel functions
- Vision
Life-sustaining therapy is not included in the qualifying categories for cumulative effect eligibility.
Now that you are aware of the major disability domains, take a look at other requirements for the disability tax credit.
- First and foremost, you must be a registered citizen of Canada or a permanent resident of Canada.
- A medical practitioner must certify that you have a prolonged disability either physical/mental.
- You must have a prolonged disability in 2 or more categories, or have a cumulative effect to be eligible for the DTC.
- You must be taking life-sustaining therapy to support vital functioning.
Medical Conditions That Qualify For The Disability Tax Credit
There are a lot of medical conditions that fall into the domain of each category of disabilities mentioned above. We’ve compiled a list of 7 major classes in which different medical conditions are included. If you have any of these medical conditions with the mentioned eligibility, it’s your sign to apply for the DTC.
- Mobility impairments:
Mobility impairment means that you have difficulty walking and moving from one place to another. Being mobile disabled refers to the state in which it takes you longer to perform movements and sometimes requires support in case of severity such as paralysis. Medical that fall under mobility impairments are:
- Multiple Sclerosis (MS)
- Cerebral palsy
- Amputation
- Severe Arthritis
In order to be eligible for the mobility impairments disability tax credit, you must be unable to walk 100 meters without significant discomfort, requiring assistive devices, or experiencing extreme fatigue.
- Neurological disorders:
Neurological disorders are medical conditions resulting from the improper/disturbed functioning of your brain. It directly impacts the motor/bodily functions of an individual. These medical conditions include:
- Parkinson’s disease
- Epilepsy
- Alzheimer’s disease
- Dementia
- Traumatic Brain Inquiry (TBI)
In order to be eligible for the neurological disability tax credit, you must have a marked restriction in at least one daily activity, such as dressing, feeding, or communicating, or require continual supervision.
- Mental health disorders:
Mental health disorders include medical conditions that result from the impairment in your mind-body interaction. They have a neurological basis and directly affect your daily life functioning. These conditions include:
- Schizophrenia
- Severe depression
- Bipolar disorder
- Autism Spectrum Disorder (ASD)
In order to be eligible for the mental health disability tax credit, it must cause you substantial limitations in judgment, social interactions, or ability to perform essential tasks independently.
- Cardiovascular & respiratory disorders:
Cardiovascular and respiratory disorders are medical conditions stemming from your heart, lungs, and throat. They include:
- Chronic Obstructive Pulmonary Disease (COPD)
- Congestive heart failure
- Cystic fibrosis
- Severe Asthma
In order to be eligible for the respiratory and cardiovascular disability tax credit, you must have a severe restriction in your ability to breathe, perform exertion-based tasks, or require medical oxygen therapy.
- Diabetes & endocrine disorders:
Diabetes and disability tax credit? Yes, you can get a non-refundable tax credit on endocrine disorders such as diabetes. The others may include:
- Hypoparathyroidism
- Addison’s disease
- Type 1 diabetes
In order to be eligible for the endocrine disability tax credit, you must require daily and time-consuming medical interventions (e.g., insulin injections, and blood sugar monitoring) to sustain life.
- Visual & hearing impairments:
Visual and hearing impairments mean severely disabled sensory functions. Major medical conditions include:
- Blindness
- Severe hearing loss
- Retinitis pigmentosa
For you to be eligible for the DTC, the impairment must be severe enough to prevent independent function without assistive technology or services.
- Gastrointestinal & chronic pain disorders:
Gastrointestinal disorders are medical conditions related to your digestive tract, stomach, small and large intestine, and the lower abdomen. Chronic pain refers to prolonged pain while carrying out different bodily/motor functions. Chronic illnesses affecting digestion, pain levels, and bodily functions can also qualify, including:
- Crohn’s disease
- Ulcerative colitis
- Irritable Bowel Syndrome (IBS) with debilitating symptoms
- Fibromyalgia
For further inquiries about the medical conditions qualifying for DTC, schedule a detailed consultation with one of our specialists.
How To Apply For The Disability Tax Credit?
The disability tax credit application process may seem confusing at first. However, with professional assistance and consultancy, it becomes much easier and smoother. We’ve divided the complete process into 5 steps so it’s more understandable for you. Follow these steps for a quicker and legally compliant tax credit claiming process:
- Obtain form T2201:
Form T2201 is basically the disability tax credit form that every applicant must fill out for further processing. It is available on the official website of the Canada Revenue Agency so you can easily access it either online or in the form of a hard copy.
- Complete the form:
The form T2201 consists of two parts. Part A and Part B.
- Part A is to be filled directly by the applicant or their legal representative.
- Part B must be completed by a qualified medical practitioner (e.g., doctor, nurse practitioner, psychologist) who confirms the severity and duration of the impairment.
- Submit the form:
Once you are done filling out the form with the required credentials and information, make sure to thoroughly review it. It reduces the chances of any potential errors that can reject your application.
Once you’ve reviewed the details, the form T2201 can be submitted to the CRA by mail or electronically via the applicant’s CRA My Account.
- Approval or rejection:
When you submit your disability tax credit application, the CRA reviews it and assesses if you are eligible for the tax credit. It may ask you for some additional medical information or records. Once the assessment is done, your application is either approved or rejected.
If approved, the tax credit can be applied retroactively for up to 10 years. If denied, applicants can request a reassessment or provide further supporting documentation.
- Claim your credit:
In case your disability tax credit application gets approved by the CRA, you can claim the credit when filing your tax return by applying the deduction under Line 31600 or Line 31800 for supporting family members.
FINAL THOUGHTS
The disability tax credit is one of the major financial reliefs the Canadian government is providing to its citizens. If you or your loved one from friends or family falls under any of the categories mentioned in this blog, you can claim up to 10 years’ worth of non-refundable tax credit for them.
While many conditions may qualify, eligibility ultimately depends on the severity of the impairment and its impact on daily living. Consulting a medical professional and working with a tax specialist can help determine if an individual meets the criteria for this valuable financial relief.
If you are unsure whether you are eligible to claim your tax credit, let us help you. Contact us at Numeracy Accounting Solutions and schedule a consultation today. We’ll be there to help you out!
Resources:
https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2201.html
https://disabilitycreditcanada.com/disability-tax-credit-ultimate-resource-guide