The Disability Tax Credit Resource Guide (Updated March 2023)
NOTE: We are excited to announce that the 2023 Disability Tax Credit (DTC) Guide has been recently updated as of February 2023, providing you with accurate and up-to-date information on the latest changes made by the Canada Revenue Agency (CRA). The following changes have been made:
- The Disability Tax Credit amounts have been updated.
- The application process for the Disability Tax Credit Program has been revised.
- The Disability Tax Credit Certificate (Form T2201) has been updated.
- The eligibility criteria for mental illnesses and psychological impairments have been modified.
- The provisions for life-sustaining therapy for individuals with Type 1 diabetes have been amended.
We hope that these updates will assist you in better understanding the DTC program and its eligibility requirements. Please note that if you have any questions or concerns, you can always consult one of our qualified professionals or contact the CRA directly for assistance.
The Disability Tax Credit is a valuable, non-refundable tax credit that has been improving the lives of hundreds of thousands of Canadians living with a disability since 1988. However, many disabled Canadians and their medical practitioners still have questions and face difficulties in fully utilizing this resource. That’s why our team has worked diligently to create this comprehensive resource guide, shedding light on this under-utilized government tax program to help educate and inform those in our community.
Our goal is to make the DTC program more understandable and accessible to those interested in applying and to provide you with valuable information to help you build a strong case in your favor. We hope that by the end of this guide, you will have a better understanding of the DTC application and approval process, eligibility criteria, financial benefits, how to fill out Form T2201, and any additional resources that may support your case.
Once you are approved for the DTC, the government will reimburse you with retroactive tax credits for up to 10 years as well as an annual refund going forward. Moreover, you will gain access to a range of governmental and provincial benefit programs, including the Registered Disability Savings Plan (RDSP), to obtain additional financial assistance. Furthermore, it is worth noting that if you are applying for a child with a disability, you may qualify for an extra refund through the Child Disability Tax Benefit.
PLEASE NOTE: This guide has been written based on our extensive knowledge and years of industry experience to ensure its accuracy and comprehensiveness with the purpose of educating and informing our fellow Canadians. However, this should not be used as a substitute for official documentation provided by the CRA on the DTC. Therefore, we request that you use it wisely!
Table of Contents
- How was the Canadian Disability Tax Credit Program Established?
- How do Canadians Qualify for the Disability Tax Credit Program?
- Is the Disability Tax Credit a Federal or Provincial Program?
- How Does the Disability Tax Credit Affect Your Other Governmental or Provincial Benefits?
- How to Determine Your Eligibility for the Disability Tax Credit in 2023
- The 3 Main Impairment Categories That Determine Eligibility for the Disability Tax Credit
- Eligibility for the Disability Tax Credit for Physical Impairments
- Eligibility for the Disability Tax Credit for Mental Illness & Psychological Impairments
- Eligibility for the Disability Tax Credit for Neurological Impairments
- What is “Markedly Restricted” as it Pertains to Eligibility for the Disability Tax Credit
- Life-Sustaining Therapy as an Eligibility Marker for the Disability Tax Credit
- What is “Prolonged Impairment” as it Pertains to Eligibility for the Disability Tax Credit
- The Methods for Refunding the Disability Tax Credit
- What is the Difference Between the Disabled and the Claimant?
- Option 1: Completing the Disability Tax Credit Application on Your Own
- Option 2: Completing the Disability Tax Credit Application with the Help of an Accountant or a Bookkeeper
- Option 3: Completing the Disability Tax Credit Application with the Help of a DTC Firm
- How Long Does It Take to Process a Disability Tax Credit Application?
- What Is Form T2201, the Disability Tax Credit Certificate?
- What are the 2 Main Components of Form T2201, Disability Tax Credit Certificate?
- Who can fill out Part B of Form T2201, Disability Tax Credit Certificate?
- How to Submit Form T2201, Disability Tax Credit Certificate?
- Appealing the Denial of Your Disability Tax Credit Application
- What is the Disability Tax Credit Base Amount for 2022
- What is the Disability Tax Credit Supplemental Amount for 2022
- Calculating Your 10 Year Retroactive Disability Tax Credit Payment
- Maximum Federal Disability Amounts for 2022 & Prior Years, Including a Maximum Supplement for Children with Disabilities
- Sadie, 5 from Ontario suffering from Ehlers-Danlos Syndrome
- Greg, 65 from Ontario suffering from Osteoarthritis
- Louis, 58 from Quebec suffering from Type 1 Diabetes
- Ruta, 55 from Ontario suffering from a Depressive Disorder
- J’yquan, 18 from Ontario suffering from ADHD & Learning Disability
What Is The Disability Tax Credit?
The Disability Tax Credit (DTC) is a non-refundable tax credit created by the Canadian Government and Canada Revenue Agency (CRA) and its purpose is to reduce the amount of income tax Canadians with disabilities and/or their families and supporters would have to pay annually hence assist with the various financial implications and expenses of having a disability or a substantial impairment. The DTC also provides an extra credit/refund (supplement) if the person found eligible is under 18 years of age at the end of the year.
The tax credit is broken down into Provincial and Federal amounts, with the Federal portion being the same across the country and the Provincial percentage varying from Province to Province.
To be found eligible for DTC, you must experience difficulty performing activities of daily living such as walking, feeding yourself, hearing, speaking, or other debilitating conditions that affect day-to-day living.
After you are found eligible for DTC, many other federal, provincial, or territorial programs such as RDSP, Canada Worker’s Benefit, and the Child Disability Benefit are available to you.
How was the Canadian Disability Tax Credit Program Established?
The Canada Revenue Agency (CRA) introduced the Disability Tax Credit program to help 22% of Canadians (CSD, 2020) and their families living with prolonged physical or mental impairments. The CRA created the program to offset the various costs associated with those impairments, such as medications, special equipment, personal support, etc. According to the findings from the most recent Canadian Survey on Disability (CSD), one in five Canadians (6.2 million) has one or more disabilities that restrict their daily activities performance.
Before 1986, the Canada Revenue Agency had a standard deduction reserved for individuals who used wheelchairs or were blind. When more disabilities and mental illnesses became more visible and recognized, the CRA introduced more taxable income benefits to those who suffered from these conditions.
In 2005, “prolonged impairments” became the definition to help people determine their eligibility. This definition created a path for persons with disabilities that struggled with everyday tasks to receive disability benefits.
How do Canadians Qualify for The Disability Tax Credit Program?
There are two different levels considered when qualifying for the DTC: the first is disabled, meaning that you cannot perform basic activities in your daily life, and the second is slowed, meaning you take a significant amount of time to perform basic activities in your everyday life. Both disabled and slowed individuals can qualify for DTC, and both will receive the same level of benefits.
Many who consider themselves “slowed” never look into the DTC due to the perception that the benefit is only for those who are severely disabled. However, this is a misconception. Those who are slowed due to their impairments can also apply for DTC. For example, conditions like arthritis may cause a person to perform day-to-day tasks slower than others, making them eligible for DTC.
While the DTC provides more significant tax equity as well as assistance with disability costs that one may face, it does not in any way formally designate or label a person as disabled. The DTC was created to help impaired people that can still work and those who are too disabled to continue to work.
Is the Disability Tax Credit a Federal or Provincial Program?
The DTC is a Federal tax credit program available to all Canadians and is administered by the Canada Revenue Agency (CRA).
The amount you receive from the government as a DTC consists of a Provincial amount and a Federal amount. The amount received is determined by the base Federal amount, which will be the same regardless of the province you live in, and the Provincial amount, which differs from Province to Province.
The DTC program was created to reduce the amount of income tax Canadians with disabilities must pay. Because of this, the Provincial amount changes based on the Province you live in, just as the amount of taxes you pay is different in each Province.
NOTE: In the “How Is the Disability Tax Credit Calculated?” we will touch more on how the amount you receive from Provincial and Federal sources is determined.
How Does the Disability Tax Credit Affect Your Other Governmental or Provincial Benefits?
The DTC is a federal program and does not affect or alter your status of other government or provincial programs such as OSAP/student loans, ODSP (Ontario), AISH (Alberta), Disability Assistance (British Columbia), etc.
Once found eligible for the DTC, and as long as you are under 59 (must be under 49 to receive Government matching contributions) you are also automatically qualified to set up a Registered Disability Savings Plan (RDSP). The RDSP is a long-term savings plan providing benefits in disability savings, grants, and bonds.
As part of the DTC, the Child Disability Benefit is a tax-free monthly payment (not based on Federal taxes paid) made to families who care for a child under age 18 with a severe and prolonged impairment in physical or mental functions.
What Is the Disability Tax Credit Eligibility Criteria?
To be considered eligible for the Disability Tax Credit (DTC), you must:
- Be a Canadian citizen or Permanent Resident of Canada.
- Have a medical practitioner certify that you have a severe and prolonged impairment or marked restricted in 1 of the categories.
- Have a medical practitioner certify that you have significant limitations in 2 or more categories.
- Or receive life-sustaining therapy to support vital function.
The following eligible disability categories, according to the Canada Revenue Agency (CRA), are as follows:
- Mental Functions (Mental Illness & Psychological Impairment)
- Eliminating (bowel or bladder functions)
- Life-sustaining Therapy
PLEASE NOTE: Eligibility for the DTC does NOT guarantee any benefits in the form of retroactive tax credits or refunds from the CRA. This is ONLY an indication that the CRA has judged your impairment as eligible for the DTC. It is important to note that if you or your supporter did not pay any taxes to the government during the eligibility period, you will not receive any money.
How to Determine Your Eligibility for the Disability Tax Credit in 2023
The Disability Tax Credit (DTC) program is intended to help Canadians who have prolonged or permanent impairments or the cumulative effects of significant limitations. According to the Canada Revenue Agency (CRA), eligibility conditions for the DTC program in Canada largely depend on an individual’s ability to perform “Activities of Daily Living” (ADL), such as bathing, dressing, walking, carrying, lifting, and other personal care activities.
To qualify for the DTC in Canada, you must first understand that eligible impairments are typically classified into 3 MAIN categories. However, it is important to note that eligibility for the DTC is not based on the diagnosis of the impairment, but rather on its severity and how it affects an individual’s ability to perform ADLs, as previously mentioned.
NOTE: The CRA updated the eligibility requirements for the DTC on June 23, 2022, allowing more individuals to apply. With that in mind, the updates to DTC eligibility mainly relate to mental functions (mental illness and psychological impairments) essential for daily life, as well as provisions for life-sustaining therapy for individuals with Type 1 diabetes.
The significant eligibility changes include:
- The addition of further criteria within the Mental Functions (Mental Illness and Psychological Impairments) category.
- The recognition of additional activities when determining the amount of time allocated for life-sustaining therapies.
- The required frequency for life-sustaining therapy has been reduced to a minimum of two times per week, instead of three.
- The inclusion of individuals with Type 1 diabetes as recipients of life-sustaining therapies.
PLEASE NOTE: Individuals whose applications for mental functions (mental illness and psychological impairments) or life-sustaining therapy were rejected after January 1, 2021, are not required to submit new applications. If an application was filed between January 1, 2021, and June 23, 2022, it will be reassessed according to the new eligibility criteria for 2023.
The 3 Main Impairment Categories That Determine Eligibility for the Disability Tax Credit
There are 3 MAIN impairment categories eligible for the Disability Tax Credit (DTC), each with its own set of conditions. These categories are as follows:
- Physical Impairments
- Mental Illness and Psychological Impairments
- Neurological Impairments
As previously mentioned, having a medical practitioner certify that you have an impairment that falls under one of the following impairment categories does not necessarily make you eligible for the DTC. Eligibility is based on the severity of the impairment and its impact on one’s ability to perform “Activities of Daily Living.”
NOTE: The following sections will discuss each impairment category and the common conditions that usually make someone eligible for the DTC in Canada. Furthermore, under the sections on mental functions (mental illness and psychological impairments) and life-sustaining therapy, we will provide a more detailed account of the changes to the DTC eligibility requirements made by the Canada Revenue Agency for 2023.
Eligibility for the Disability Tax Credit for Physical Impairments
Physical impairment covers a wide range of debilitating conditions that prevent someone from naturally living their day to day life. A physical impairment diagnosis is not enough to make one eligible for DTC; instead, eligibility comes from the diagnosis’s effects. The diagnosis must affect psychological activities of daily life such as making decisions, making judgment, memory, concentration, etc. The CRA considers the following conditions as potentially eligible physical impairments for the Disability Tax Credit:
Eligibility for the Disability Tax Credit for Mental Illness & Psychological Impairments
Mental illness can have a profound impact on an individual’s ability to carry out daily tasks, and in severe cases can even impair their ability to take care of themselves without professional assistance or intervention.
According to the Canada Revenue Agency (CRA), you may be eligible for the Disability Tax Credit (DTC) if your mental functioning is deemed to be severe and prolonged, resulting in a marked restriction. This means that it affects your ability to perform the necessary mental functions of everyday life, referred to as “Activities of Daily Living” (ADL).
To clarify the current eligibility criteria for the DTC, it is important to note that for tax years up to 2021, the CRA deemed memory, adaptive functioning, judgment, problem-solving, and goal setting as essential mental functions for everyday life. However, in 2022, the CRA revised its eligibility guidelines, expanding the definition to include individuals who experience difficulty performing the mental functions necessary for everyday life, such as:
- Adaptive Functioning
- Perception of Reality
- Regulating Behaviour and Emotions
- Verbal and Non-Verbal Comprehension
Bearing this in mind, the CRA considers the following conditions to be potentially eligible mental impairments for the DTC:
- Mood disorders (such as depression or bipolar disorder)
- Anxiety disorders
- Personality disorders
- Psychotic disorders (such as schizophrenia)
- Eating disorders
- Trauma-related disorders (such as post-traumatic stress disorder)
- Substance abuse disorders
Eligibility for the Disability Tax Credit for Neurological Impairments
Neurological impairments affect the brain and prevent it from accurately or consistently controlling the body in severe cases. Working with a neurological impairment can be incredibly difficult as it makes things such as holding objects or walking independently challenging. CRA considers the following conditions as potentially eligible neurological impairments for the Disability Tax Credit:
What is “Markedly Restricted” as it Pertains to Eligibility for the Disability Tax Credit
“Markedly restricted” is also identified as a qualifying criterion when:
- The individual cannot perform, or take an inordinate amount of time to complete two or more of the ADL’s listed above, even with therapeutic assistance, technological/adaptive devices, and/or medication.
- “inordinate amount of time”: usually three times longer than the amount of time an abled person of the same age would take to complete the activity.
- The severe restriction must affect the individual 90% of the time or more. The combination of two or more moderate restrictions such as walking and dressing, for example, cumulatively, adds up to a 90 percent restriction.
“Greg M, was diagnosed in 2005 with Osteoarthritis, underwent knee surgery in the same year due to tears in both knees. It takes him 3 times longer than a normal person to walk or perform any other activities in daily living. Greg has to sit to put on garments and socks. His wife does most of the housework due to his severe condition. Greg’s impairment is considered “markedly restricted” and his application was approved by the CRA”
Life-Sustaining Therapy as an Eligibility Marker for the Disability Tax Credit
Life-sustaining therapy is another marker of Disability Tax Credit eligibility. One must spend an excess of 14 hours per week on the treatment required for survival, such as insulin therapy, chest physiotherapy (helps with breathing), and kidney dialysis (blood filter).
That said, life-sustaining therapy often requires a substantial amount of time and money from individuals and their families, who rely on the treatment to perform their “Activities of Daily Living” (ADL). Therefore, individuals whose lives depend on life-sustaining therapy may be eligible to receive a non-refundable tax credit through the DTC program to help offset the medical expenses and lost income associated with such therapy.
“Louis G, suffers from Type 2 Diabetes, is presently on injections 4 times/day. He has to take diabetes related tests daily, which takes up over 2 hours per day, and more than 14 hours a week. The daily injections and tests Louis has to take is considered life sustaining therapy”
NOTE: Effective June 2022, the Canada Revenue Agency (CRA) has reduced the required frequency of life-sustaining therapy from three to two times per week; however, the criteria for 14 hours of weekly life-sustaining therapy remain unchanged. Moreover, as of the June 2022 update, individuals diagnosed with type 1 diabetes are deemed to have met the criteria for the DTC.
With that in mind, the CRA states that, in order to be eligible for life-sustaining therapy in 2023, the following criteria must be met:
- The therapy is needed to support a vital function.
- The therapy is needed at least two times per week.
- The therapy is needed for an average of at least 14 hours per week.
Please keep in mind that the 14 hours dedicated to therapy only include the time taken away from regular daily activities specifically for the purpose of receiving therapy. This also includes the time needed to set up a portable device. However, if you need to regularly adjust your medication dosage, the time you spend determining and administering it can count towards the 14-hour-per-week requirement for the DTC.
Additionally, if your therapy necessitates the daily consumption of a special food or formula to manage your body’s needs, the time spent determining the appropriate amount can count towards the 14-hour weekly requirement. Similarly, if a child is too young to do the therapy activities, the time that another person spends doing and supervising those activities can count towards the 14-hour-per-week requirement.
What is “Prolonged Impairment” as it pertains to Eligibility for the Disability Tax Credit
The CRA has identified “prolonged impairment” as the working condition to determine one’s eligibility for the DTC.
The following is what they look for when determining if an impairment is considered prolonged:
- The individual requires and receives extensive therapy to aid in performing activities of daily living.
- The individual has had surgeries, hospitalizations, short and long-term disability, employment restrictions, etc.
- The individual’s impairment has lasted or is expected to last for a minimum of 12 consecutive months.
List of Prolonged Impairments:
The following is a list of some of the more common conditions the CRA considers when marking one’s eligibility for the Disability Tax Credit:
- Digestion Disorders: Inflammatory Bowel Disorder, Colitis, Prostate Problems
- Limited Mobility Issues – Chronic Pain, Fibromyalgia, Arthritis, Spinal Stenosis, Ankylosing Spondylitis, Back and Neck Problems
- Breathing Disorders: COPD, Emphysema, Tuberculosis, Asthma
- Hearing Impairments
- Cognitive Impairments: Memory Loss, Dementia, Alzheimer’s, traumatic and acquired brain injury, Parkinson’s.
- Psychological Disorders: ADHD, Autism, Depression, Panic Disorder, Mood Disorders, Bipolar Disorder, Psychosis.
- Autoimmune Diseases: Rheumatoid arthritis, Diabetes Type 1
FIND OUT IF YOU ARE ELIGIBLE TO RECEIVE THE DISABILITY TAX CREDIT!
How Does the Disability Tax Credit Work?
The DTC is a refund on federal taxes paid by Canadian individuals with disabilities OR their supporters. i.e. if the disabled person or their supporter has paid or is paying federal taxes (usually above 20-25k income), they then can claim and receive a tax credit if approved for the Disability Tax Credit.
The Methods for Refunding the Disability Tax Credit
- Retroactive one-time refund – The CRA will evaluate your DTC application and see when you were diagnosed or how long you had the symptoms of the qualifying disabilities; they can approve you for the DTC for up to the past ten years. If you or your supporter have been paying federal taxes during those years, you will receive a lump sum payment as a refund for the years you were found eligible.
- Annual refund – if you have been found eligible to receive the DTC, you will be able to claim the DTC refund annually when you prepare your taxes. But, please be aware that most DTCs expire after a few years and will require you to re-apply.
A key to understanding how the DTC application process works is to understand the differences between the disabled and the claimant.
What is the Difference Between the Disabled Person and the Claimant?
When a person is applying for the Disability Tax Credit (DTC), they can be both the disabled and the claimant, but there are many situations where the disabled and the claimant are not the same person, so we must understand the difference between both.
The Disabled is the individual who has impairments or conditions that qualify them for the DTC.
In many cases, the person’s impairments may have prevented them from working and paying federal taxes. They will qualify for the DTC based on their impairments and can “transfer” those credits to their supporter, who will then become the claimant.
To be considered as a claimant by the CRA, you must meet the following criteria:
- The disabled person is your spouse, common-law partner, parent, grandparent, child, grandchild, brother, sister, aunt, uncle, niece, or nephew.
- If you are not related to the disabled person but you can prove to the CRA that you support the disabled person with the necessities of life i.e. food, shelter, and clothing. For example, Ian is 26 years old and lives on his own but his parents pay his rent, and buy his food and clothing. Ian’s parents can claim the DTC amount if Ian is eligible for the DTC
To learn more, please review the CRA’s information about Line 31800 – Disability amount transferred from a dependant.
NOTE: You cannot claim the disability amount that was transferred from the dependent for a child that you did not pay child support for. Though, if separated from your spouse or common-law partner for a portion of the year you are applying for, special rules may apply.
Can You Split the Disability Amount with Another Supporter?
You can split any unused part of the disability amount with an additional supporting person. However, the amount claimed for the dependent can’t be more than the maximum amount allowed for that dependent.
- Paying federal taxes is NOT an eligibility criterion for the DTC as it is not based on your income but rather your impairments.
- Once you’re found eligible for the DTC, and you want to maximize the refunds, you can transfer the credits to your supporter (some or all of the years)
- In Child Disability Tax Credit cases, you don’t need to pay federal taxes. If a child is found eligible for Disability Tax Credit, the parent/guardian will have their Canada Child Benefits increased for those years.
How to Apply For Disability Tax Credit
The DTC application process is made to be relatively straightforward and accessible to all persons interested in applying. There are two ways to fill out Form T2201, Disability Tax Credit Certificate, to apply for the DTC; digital application, and manual completion of PDF. Both of these need to be filled out, completed and signed by the individual applying, and their medical practitioner, before being submitted to the CRA for further assessment.
Qualifying and getting approved for the DTC is not always a simple process. In fact, a large percentage of Canadians who apply each year have their applications denied by the CRA.
Though, every person looking to apply is held to different circumstances. Therefore, we suggest that you consider one of the following routes for applying:
Option 1: Completing the Disability Tax Credit Application on Your Own
To apply for the Disability Tax Credit on your own, follow these steps:
- Download the T2201 Form directly from the CRA’s website. There they offer two versions of the Form:
- Complete the individual section, Part A of the form, then take it to your health care practitioner to fill out, and commission Part B.
- Submit the certified T2201 form by mail to the CRA’s processing centre.
The main benefit of taking this “DIY” route is the minimal cost associated with it. The only fee attached to applying independently is the one paid to the medical practitioner for filling out the form, which is usually a standard fee of $25 to $150.
As per Ontario Medical Association’s Physician’s Guide to Uninsured Services, This fee is capped at $44.95 for an authorized medical practitioner to fill out Part B of the form and certify your medical conditions, highlighted in Form T2201.
However, there are a few drawbacks to the “DIY” approach, such as:
- Many medical practitioners are not familiar with the eligibility criteria and may not fully or thoroughly certify your condition.
- Many medical practitioners do not have the time to invest in your case, nor do they try to sufficiently describe your conditions to the CRA.
- Your DTC application may result in a “follow-up questionnaire” if requested by the CRA. This questionnaire requires further details and an in-depth explanation of your impairments and their effects on your “activities of daily living”. All of which will need to be provided by your medical practitioner. However, some medical practitioners may get confused by this questionnaire. Given that, this questionnaire will require them to spend more time with you and put more effort into your DTC application. If not filled out accurately and adequately, your DTC application will be denied by the CRA.
- If your application is successful and you get approved for the DTC, you may not have the knowledge or understanding of how to maximize your credits and applicable benefits. Therefore, you might not be granted the maximum refund amount for which you are eligible.
NOTE: Although you are responsible for any fees that the medical practitioner charges you to fill out Form T2201. You may be able to claim those fees as a medical expense on line 33099 or 33199 of your tax returns.
Option 2: Completing the Disability Tax Credit Application with the Help of an Accountant or a Bookkeeper
Most accountants and bookkeepers look at the DTC as a part of the Canadian Tax code. Therefore, for them, your DTC application represents a simple tax document. Once you inform your accountant about your qualifying disability, they will print out the T2201 form and suggest that you have it filled out and commissioned by your medical practitioner.
Again, the main benefit of this approach is the minimal cost involved. Provided that most accountants/bookkeepers consider this a simple service and will not charge you for their advice.
However, there are a few drawbacks to using an accountant or bookkeeper to apply for the Disability Tax Credit, those are as follows:
- Accountants have very little knowledge of the eligibility criteria required by the CRA. As such, they are likely to refer you to your doctor for assistance in completing your application.
- If approved, the accountant may charge a flat fee. As they will need to apply for the credits and benefits on your behalf.
The two options above can work well if the applicant’s impairments are severe, and their medical practitioner has experience and understanding of the eligibility criteria for applying for the Disability Tax Credit.
However, not all cases are as “clean-cut” and simple. In fact, most DTC applicants fall into the “grey area” where the applicant may demonstrate some qualifying impairments but not enough to be found eligible according to the CRA guidelines.
NOTE: If your DTC application is denied by the CRA, reversing their decision can be a challenging process. You will have to “explain” your impairments in a different and more precise manner or possibly obtain the assistance of a new medical practitioner.
Option 3: Completing the Disability Tax Credit Application with the Help of a DTC Firm
Some disabled Canadians choose to go with the third option of hiring a specialized Disability Tax Credit firm, to help them through the application process.
Although, there are many benefits to working with a specialized DTC firm (like Disability Credit Canada), for instance:
- A specialized Disability Tax Credit Firm has a strong understanding of the eligibility criteria and the specific CRA requirements for various disabilities.
- The firm will review your medical records and communicate with your medical practitioner on your behalf. Working with them to fill out and complete Form T2201, and if necessary, fill out the “follow-up questionnaire.”
- Once your DTC application is approved, the firm will apply for all eligible credits and benefits to work towards maximizing the amount of refunds, credits, and benefits you receive.
- This is a stress-free process, with minimum effort required on your behalf. Most of the work is taken care of by the DTC firm.
- Most DTC firms work on a NO-WIN NO-FEE basis. Meaning they have a greater incentive to get your application approved. However, if your application is not successful, you are not obligated to pay for their services.
- Most DTC firms will also cover most if not all expenses accrued during the application process (doctor fees, medical records, etc.)
The only drawback to working with a Disability Tax Credit Firm is the end fee if your application is approved. Once your application is approved and you receive the refunds you deserve, you are required to pay the DTC firm a certain percentage of the retroactive refunds reimbursed by them.
How Long Does it Take to Process a Disability Tax Credit Application?
Regardless of the method used to complete your Disability Tax Credit Application, it will typically take between 3 to 6 months for the CRA to assess the application and determine if you’re eligible for the Disability Tax Credit (DTC). However, this time frame can vary depending on the time of year, processing centre location, and the complexity of your impairment or application.
Furthermore, if your application is approved for previous years, your tax returns will have to be reassessed. As such, it may take 1-3 months or so to process your retroactive tax credits. On average, it will usually take 3 months to process a new application, but some can take up to a year before they are finalized.
NOTE: To quickly find out when you can expect the CRA to complete your request or get back to you about the status of your application, you can use the Check CRA Processing Times tool for further assistance.
How Do I Fill Out a Disability Tax Credit Form?
NOTE: In October of 2021 the CRA made substantial changes to the Disability Tax Credit Certificate in an effort to make it simpler and easier to complete.
The information below is a short explanation of the new Disability Tax Credit Certificate (T2201) and to learn more you can visit our t2201 Disability Tax Credit Certificate page.
Filling out Form T2201, Disability Tax Credit Certificate accurately is extremely important to the overall success and expediency of your Disability Tax Credit application. As any incorrect or insufficient information can easily lead to serious delays or even having your application denied.
Under the following section, we will be walking you through each part of Form T2201, Disability Tax Credit Certificate, in an effort to make the application process easier to understand and complete.
What is Form T2201, the Disability Tax Credit Certificate?
To apply for the Disability Tax Credit (DTC) you must be a Canadian citizen or permanent resident and you must submit a certified Disability Tax Credit Certificate – T2201 to the CRA.
To complete Form T2201, first, you must fill out all personal details under the ‘individual’s section’ of the form, denoted Part A (pages 1-2).
Next, you must ask a medical practitioner to fill out and complete Part B (pages 3-16) of Form T2201. There they will answer a series of questions to provide detailed information on the impairments you or a family member are suffering from. Most importantly, your medical practitioner must explain in detail how the impairments you have to affect your ability to perform “activities of daily living”.
NOTE: The Disability Tax Credit Certificate T2201 is available to download on the CRA’s website. Additionally, if your medical practitioner deems you eligible for the DTC, you can direct your medical practitioner to the digital application for medical practitioners.
What are the 2 Main Components of Form T2201, Disability Tax Credit Certificate?
Form T2201, Disability Tax Credit Certificate consists of 2 main parts:
Under the “Individual’s section,” of Form T2201, the CRA requires you to provide personal information for the disabled person and/or claimant. Some of the information you will be asked to provide, is as follows: Name, Address, Date of Birth, and Social Insurance Number. Additionally, if you want to adjust your tax returns make sure that is indicated in question 3 of Part A.
Under the “Medical practitioner’s section” of Form T2201, your medical practitioner will be asked to fill out and certify the information provided in the sections that apply, are correct and complete, then sign the form.
- In this section the correct medical practitioner will be asked to certify your medical impairment resulting from a condition and the effects of said impairment on your activities of daily living in several areas, such as Vision, Speaking, Hearing, Walking, Eliminating, Feeding, Dressing, Mental functions, Cumulative effect of significant limitations, & Life-sustaining therapy.
- The corresponding health care practitioner must initial beside their designation and fill out each of the impairment sections that apply to you.
- Cumulative Effect of Significant Limitation, Page 14: This page of Form T2201, is only applicable to those persons who experience limitations in more than one impairment category, with regard to the cumulative effects of your daily living restrictions.
- Life-Sustaining Therapy, Page 15: This page is only applicable to those persons who are using life-sustaining therapy.
Who can fill out Part B of Form T2201, Disability Tax Credit Certificate?
This certification part of the form must be filled out by the correct medical practitioner (medical doctor, nurse practitioner, optometrist, speech-language pathologist, audiologist, occupational therapist, physiotherapist, or psychologist).
To be eligible to sign and certify Form T2201, Disability Tax Credit Certificate, the CRA will mandate that a “medical practitioner” must have been approved as a signing authority.
Below is a full list of different medical practitioners authorized to certify Part B of The DTC Certificate Form T2201:
Walking, feeding, dressing
Mental function necessary for everyday life
According to the 2017 Federal Budget, nurse practitioners have been included in the medical practitioners’ list and are now authorized to certify DTC Certificates. Though, this does not change the status of registered nurses.
Providing Nurse Practitioners the ability to certify DTC applications just like medical doctors is great news for Canadians living with disabilities. As nurse practitioners are patients’ first point of contact (e.g., Canada’s North, remote communities, etc.).
How to Submit Form T2201, Disability Tax Credit Certificate?
Once you have completed Form T2201, and it has been signed and certified by your medical representative, they can submit it along with any other accompanying medical documentation to the CRA in one of the following ways:
- Electronically, using the “Submit documents” feature in My CRA Account or Represent a Client
- By mail to your nearest tax center
NOTE: Remember to always keep a copy for your own records.
After submitting Form T2201, to the CRA it can take anywhere from 3 to 6 months before you are advised of the CRA’s decision concerning your eligibility. During that period, one of the following may occur:
- If the CRA needs more information they may send a “questionnaire” directly to the medical professional who signed and certified the certificate. Asking them to clarify some of the information needed to form their decision. The medical practitioner must answer each question and send it back to the CRA in a timely fashion.
- The CRA will approve your application. Once approved, the CRA will send you a “notice of determination” informing you of the years you were found eligible to receive the DTC. Additionally, the CRA will reassess your retroactive taxes and issue you a refund for the retroactive years, which apply.
- The CRA will deny your application, due to insufficient or contradictory information or ineligibility.
Appealing the Denial of Your Disability Tax Credit Application
- You can call the CRA and request further clarification on your application @ 1-800-959-8281, between the hours of 9:00 a.m. and 5:00 p.m., Eastern Standard Time.
- You can write to the CRA requesting a review of your application. In such a case, you should also include any new or updated medical information from a medical practitioner who is familiar with your situation.
- You can appeal the CRA’s decision by raising a formal objection within 90 days of the CRA sending you a “notice of determination.”
- Or you can submit a “fresh” T2201 form with new information about your impairments and/or use a different medical practitioner with greater knowledge and understanding of your impairment and the DTC eligibility criteria.
FIND OUT IF YOU ARE ELIGIBLE TO RECEIVE THE DISABILITY TAX CREDIT!
How is the Disability Tax Credit Calculated?
Calculating the Disability Tax Credit (DTC) and understanding the amount of money one will receive at the end of the process can be a daunting task for the average person who is not an accountant or a bookkeeper. Thus, in an effort to simplify matters, one must understand that the DTC comprises a “Base Amount” and, if applicable, a “Supplemental Amount,” which is available to eligible persons who are under 18 years of age at the end of the tax year.
The “Base Amount” and “Supplemental Amount” portions are provided by both federal and provincial sources, as follows:
- The federal DTC portion is 15% of the disability amount for that tax year.
- The provincial DTC portion is approximately 10% (the percentage varies from province to province) of the disability amount for that tax year.
What is the Disability Tax Credit Base Amount for 2022
If the eligible person is an adult, he or she will only receive the federal and provincial Disability Tax Credit (DTC) “Base Amount”.
- The federal disability amount for 2022 is $8,870, and 15% of that is $1,330.5
- The provincial disability amount in Ontario for 2021 is $9,001, and 10% of that is $900.1
Therefore, a DTC-eligible adult in Ontario would have received $1,330.5 + $900.1 = $2,230.60
What is the Disability Tax Credit Supplemental Amount for 2022
If the eligible person is under 18 years of age at the end of the tax year, then he or she will be eligible to receive the Disability Tax Credit (DTC) “Base Amount” as well as the DTC “Supplemental Amount.”
- The federal supplemental disability amount for 2022 is $5,174 and 15% of that is $776.1
- The provincial supplemental disability amount for 2022 is $5,250 and 10% of that is $525
Therefore, a DTC-eligible minor in Ontario would have received:
- “Base Amount” as calculated above of $2,230.60
- “Supplemental Amount” of $776.1 + $525 = $1,301.1
If we add the “Base Amount” and “Supplemental Amount,” we will see that an eligible person under 18 years of age in Ontario would receive $3,531.70 in Disability Tax Credits for the 2022 tax year.
To make it easier to understand and calculate the approximate disability tax credits you are eligible for, you can follow the formula below:
- An eligible adult can receive a total of $1,500-$2,500 per year of eligibility.
- An eligible Minor can receive a total of $3,000-$4,500 per year of eligibility.
NOTE: To summarize, in order to calculate the total amount of DTC you are eligible to receive, you need to multiply the number of years by the amount per year.
Calculating Your 10-Year Retroactive Disability Tax Credit Payment
Calculating your 10-year retroactive refund is more or less the same as calculating for your current year. The only difference is that you will be using the maximum Disability Amounts of the Year to get the retroactive payment. Below is a chart that details these amounts. As a rough estimate, however, you may receive up to the following:
- If an adult is found eligible to receive the DTC for the past 10 years, he/she will receive between $15,000 and $25,000 in a lump sum amount.
- If a minor is found eligible to receive the DTC for the past 10 years, he/she will receive between $30,000 and $45,000 in a lump sum amount.
If your DTC application has been approved and you are trying to figure out how much you’ll be receiving, our Disability Tax Credit Calculator is available here to further understand and estimate your refunds.
Maximum Federal Disability Amounts for 2022 & Prior Years, Including a Maximum Supplement for Children with Disabilities
The chart below has been updated as of February 2022 to ensure that all the information and Disability Tax Credit amounts presented here are up-to-date and relevant.
Maximum Disability Amount
Maximum Supplement For Persons Under 18
Common Reasons For DTC Denial
- Incomplete form: missing or incomplete Information on the t2201 certificate is often the reason for denial. Make sure to fill out the application correctly and thoroughly review it before submitting it to the CRA.
- Medical Practitioner: Most applicants use their family doctor to certify their t2201 because the family dr. is usually the one who is the most familiar with the history of your impairment. In some cases, the doctor may have retired or will not complete it to the best of their ability. Some doctors are not familiar with the eligibility criteria or aren’t “motivated” to fill out the form on your behalf. The medical practitioner’s role is crucial. You should do your best to use a medical doctor who is motivated to help you and is willing to spend extra time with you to understand your impairments and describe them to the CRA.
- Lack of knowledge: Some medical practitioners are not familiar with the DTC’s eligibility criteria and how the CRA makes its decisions.
- Consistency of Medical Diagnosis: As discussed above, the CRA may send a “questionnaire” to the medical practitioner requesting additional clarifications. If the information supplied in the t2201 is not consistent with the answers given, the CRA may deny the application.
- Impairment Didn’t Qualify: the CRA wants to know how the impairment affects your “activities of daily living” (ADLs), not the diagnosis. Therefore, the medical practitioner needs to highlight how these impairments affect daily living’s basic functioning.
- Duration of Impairment: The CRA will not approve your DTC if your impairments are diagnosed less than 12 months before applying for the credits and/or the impairment affects your ability to perform the basic function of daily living less than 90% of the time.
- Cumulative effects of impairment: It is common for the medical practitioner to fill out the t2201 focusing on one impairment only. However, most impairments affect the disabled person in various ways and cause a “cumulative effect” therefore; it is imperative to include those cumulative effects in the t2201.
- Supporting Medical documents: you should include all supporting reports or documents that are important and relevant to the application.
Once You’re Approved for Disability Tax Credit
After being approved for DTC, you are eligible for several other federal, provincial, or territorial programs, such as:
COVID One-Time Relief Payment to Persons with Disabilities
One-Time Relief Payment to Persons with Disabilities is a non-taxable, non-refundable, one-time payment for up to $600 is available for those with disabilities who require additional assistance due to expenses incited by the COVID-19 pandemic.
The Registered Disability Savings Plan
Registered Disability Savings Plan (RDSP) is a savings plan that provides disability savings grants and bonds to disable, eligible Canadians.
The Canada Disability Savings Bond:
The Canada Disability Savings Bond offers $1,000 a year to families who make between 30,000 $45,916 or less.
The Canada Disability Savings Grant
The Canada Disability Savings Grant offers $1,500 if you contribute $500 to RDSP and an additional $2,000 if you contribute $1,000, which can be done once a year.
Disability Tax Credit Case Studies
At Disability Credit Canada, we are always looking out for our client’s best interests and use our vast knowledge from many years of experience to formulate the strongest case possible!
To give you a better picture of what working with a DTC firm, like Disability Credit Canada, can do for you when applying for the Disability Tax Credit, we have highlighted the results and conditions of some of our more recent case studies, below. All of which, we have had the pleasure of working on to ensure their success!
Here are some examples of the DTC cases we have worked on in the past:
Sadie, 5 from Ontario suffering from Ehlers-Danlos Syndrome
Sadie was diagnosed with Ehlers-Danlos Syndrome (EDS) at the age of 3 and wears a Spio suit (meant to brace her fragile body), which requires extensive one-on-one care in order for her to perform ADL (activities of daily living). Additionally, due to Sadie’s condition, she also requires the use of speech therapy and a physiotherapist.
Despite her severe impairments, Sadie’s initial Disability Tax Credit application was still denied by the CRA. That’s when her parents approached Disability Credit Canada for further assistance. We carefully reviewed the original DTC application and found several issues that had to be corrected in order to have her application approved. After reviewing Sadie’s medical records and speaking with her pediatrician and medical specialists, we could then thoroughly formulate a new, stronger case using the updated information provided. Once her application was resubmitted, the CRA reviewed Sadie’s DTC appeal and found her to be eligible to receive the DTC for the years of 2016 to 2023.
Sadie’s parents received a total of $8,454.84 in the retroactive refund and are expecting about $4000 each year in Child Disability Benefits for the next 5 years.
Greg, 65 from Ontario suffering from Osteoarthritis
Greg was diagnosed in 2005, with Osteoarthritis and underwent knee surgery in the same year due to muscular tears in both of his knees. As a result, it takes Greg 3 times longer than the average person to walk or perform any other “activities in daily living”.
Not to mention, Greg now has to sit down to put on his undergarments and socks and experiences difficulties with standing up from a seated position, which most of the time causes him serious pain. Due to Greg’s severe condition, his wife has taken on most of the housework. Thankfully, Disability Credit Canada formulated a very strong case for Greg based on his “markedly restricted” impairments to present to the CRA.
Greg’s Disability Tax Credit application was approved, and he was found eligible to receive the DTC from 2012-2023. His retroactive refund was $10,552.76.
Louis, 58 from Quebec suffering from Type 1 Diabetes
Louis suffers from Diabetes Type 1, which requires that he is injected with insulin 4 times per day and has his blood sugar checked every few hours. Disability Credit Canada worked with Louis’ physician to formulate a strong case on his behalf, where we detailed the amount of time, effort, and activities Louis does on a daily basis and submitted that information to the CRA as part of Louis’ DTC application.
Louis’ DTC was approved; he was found eligible to receive the DTC from 2000 to 2022 and he got $9,582.88 in retroactive refunds.
Ruta, 55 from Ontario suffering from a Depressive Disorder
Ruta’s major depressive disorder was diagnosed in 1998. Then just 6 years ago she became drug-resistant, due to her severe mental disorder. As a result, Ruta cannot perform “activities of daily living” and cannot make appropriate decisions or judgments for herself. In order to approve Ruta’s DTC application, the CRA requested additional information from her physician. At this point, Disability Credit Canada reviewed her medical history again and worked with the Doctor to provide the CRA with the additional information needed to approve her application as requested.
Ruta’s DTC was approved, she was found eligible for the DTC from 1986-2023 and received $16,135.76 in a total retroactive refund.
J’yquan, 18 from Ontario suffering from ADHD & Learning Disability
J’yquan’s learning disability was diagnosed when he was at the age of 6. Since then, he has been coping with severe memory problems, neglected hygiene, and cannot make appropriate decisions/judgments for himself required to perform “activities of daily living”. Not to mention J’yquan has developed a history of violence as a result of his learning disability.
Disability Credit Canada had to interview his parents, and teachers and review his medical history carefully as we prepared the initial DTC application and helped with correctly addressing and filling out the “questionnaire” that was sent over to his primary medical practitioner by the CRA for more information.
J’yquan was found eligible for the Disability Tax Credit from 2007-2019 and his parents received $22,070 in retroactive credits and benefits.
The purpose of the Disability Tax Credit (DTC) is to help Canadians with disabilities, their families, and supporters by reducing the amount of income tax they pay annually. This tax credit program aims to provide financial assistance to help with the medical expenses and financial challenges associated with having and living with a disability or substantial impairment.
That said, when it comes to the DTC, there is a common misconception among our fellow Canadians that the DTC is only available to assist those living with severe disabilities. However, the true purpose of this program is to support individuals who have difficulty completing or following through with “Activities of Daily Living” (ADL) but who are still capable of working.
Another common misconception about the DTC is that being eligible automatically means being considered disabled, which can create a stigma around the program. However, approval for the program does not necessarily mean one is disabled. As previously mentioned, the DTC program is intended for those who require additional support with activities of daily living but are still capable of working.
Since its establishment in 1988, the DTC has been improving the lives of hundreds of thousands of Canadians living with a disability by providing them with a valuable, non-refundable tax credit. That said, many people are not aware of the criteria necessary to qualify for the DTC and mistakenly believe that submitting the T2201 form is sufficient for approval. However, it is crucial to building a strong case, which requires careful and thorough preparation to provide as much information as possible about your condition along with supporting evidence to back up your claims.
That’s why our dedicated team of highly trained professionals has created this comprehensive DTC resource guide to assist our fellow Canadians in better understanding the DTC independently. Our team has worked diligently to ensure that all of the information presented in this guide is accurate and up-to-date as of 2023, reflecting the latest changes made by the Canada Revenue Agency (CRA). It includes information on eligibility, the application process, additional benefits, and different application options, including their advantages and disadvantages. Furthermore, we have provided an estimate of the potential amount you could receive from the DTC.
Our primary objective is to provide the most comprehensive guide possible so that you can approach your DTC application with confidence. Therefore, we hope that after reading this guide, you will have all the necessary information to confidently begin your DTC application and get approved. Additionally, if you need further assistance, we offer our expertise on a no-win, no-fee basis. Sign up today for our free assessment and get the help you’re entitled to!
At Disability Credit Canada, we are proud to help disabled Canadians access CPP-Disability Benefits, the Disability Tax Credit, and Long-Term Disability (LTD) Benefits. For more information, we invite you to explore our other resources, which are as follows:
- Disability Tax Credit Calculator
- Disability Tax Credit Provincial Resources
- The Definitive Guide to The Child Disability Tax Credit
- Disability Tax Credit for Arthritis Sufferers
- Disability Tax Credit for ADHD or ADD
- Disability Tax Credit for Anxiety Disorders
- Long-Term Disability denial and Appeal
- Common Medical Conditions Eligible for Long-Term Disability Benefits