The Disability Tax Credit Resource Guide (Updated March 2025)

NOTE:

Big news! The Ultimate 2025 Disability Tax Credit (DTC) Resource Guide is here—your go-to resource for the latest CRA regulations on applying, eligibility, Form T2201, and claiming your Disability Tax Credit.

Whether you’re applying for the first time or trying to maximize your benefits and credits, this updated March 2025 guide breaks down everything you need to know about the Disability Tax Credit.

 The DTC has been helping Canadians with disabilities since 1988, but the process can still feel overwhelming. With recent policy changes and financial pressures increasing across Canada, staying informed is more important than ever.

Key Updates You Need to Know:

• DTC amounts have changed for 2025—stay informed about updated credit values.
• The application process has been revised to reflect new CRA guidelines.
• Form T2201 (Disability Tax Credit Certificate) has been updated—understand the latest requirements.
• Eligibility criteria for mental illnesses and psychological impairments have been modified.
• The rules for life-sustaining therapy for Type 1 diabetes have been adjusted.

The Canada Disability Benefit (CDB) is launching soon, but DTC approval is required to qualify—applying now is crucial.

Why the DTC Matters More Than Ever in 2025

With inflation still affecting essential goods and the U.S. imposing tariffs that could impact the economy, affordability remains a major concern for Canadians. An upcoming federal election may also bring policy changes that could affect tax credits and disability support. The DTC plays a critical role in easing financial strain, offering tax relief, and unlocking access to other financial programs.

Yet, despite its benefits, many people face challenges when applying. The process is detailed, healthcare providers often misunderstand eligibility criteria, and missing information can lead to delays or denials. That’s why we created this guide—to simplify the process and give you the tools to build a strong case.

This guide covers everything you need, from eligibility and Form T2201 instructions to retroactive tax credits and additional programs like the Registered Disability Savings Plan (RDSP) and provincial disability benefits.

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Disclaimer: This guide is based on our extensive knowledge and experience to provide accurate and comprehensive information. However, it is not a replacement for official CRA resources. For the latest details, we recommend consulting official CRA documentation.

Table of Contents

1. What Is The Disability Tax Credit?

• How was the Canadian Disability Tax Credit Program Established?
• The importance of the Disability Tax Credit
• 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?

2. What are the Disability Tax Credit Eligibility Criteria?

• How to Determine Your Eligibility for the Disability Tax Credit in 2025
• Exploring Cumulative Effect Eligibility
• 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

3. How Does The Disability Tax Credit Work?

• The Methods for Refunding the Disability Tax Credit
• What is the Difference Between the Disabled and the Claimant?

4. How to Apply For Disability Tax Credit

• 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?

5. Challenges of Getting Approved for the Disability Tax Credit
6.  How Do I Fill Out A Disability Tax Credit Form?

• 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

7. How is the Disability Tax Credit Calculated?

• What is the Disability Tax Credit Base Amount for 2023
• What is the Disability Tax Credit Supplemental Amount for 2023
• Calculating Your 10-Year Retroactive Disability Tax Credit Payment
• Maximum Federal Disability Amounts for 2023 & Prior Years, Including a Maximum Supplement for Children with Disabilities

8.  Common Reason for DTC Denial
9.  Once You’re Approved for Disability Tax Credit, What Else Can You Do?
10.  Disability Tax Credit Case Studies

• 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

11. Conclusion

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, Canada Disability Benefit (CDB), 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 27% of Canadians (CSD, 2023) 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 who struggled with everyday tasks to receive disability benefits.

The Importance of the Disability Tax Credit (DTC)

Many individuals may not realize that receiving DTC approval can unlock various opportunities, enabling eligibility for additional federal, provincial, and territorial programs. These encompass essential initiatives like the Registered Disability Savings Plan (RDSP), Canada’s workers’ benefit, and the Child Disability Benefit, which are inaccessible without DTC qualification. DTC can provide crucial financial support, particularly for those facing financial hardships due to disabilities. For example, if you receive the Child Disability Benefit, that money can be utilized for professional help, accessible gadgets, and other necessities. Moreover, the DTC is structured to alleviate the burden of income tax payments, potentially resulting in savings on your forthcoming tax filings. In essence, the DTC is tailored to enhance your financial situation, making it imperative to explore application avenues if you meet the eligibility criteria.

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 potentially 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 who 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?

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:

1. Physical Impairments
2. Mental Illness and Psychological Impairments
3. 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 2025.

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.

For example:

“Greg M. was diagnosed in 2025 with Osteoarthritis and 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.

For example:

“Louis G. suffers from Type 2 Diabetes and 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 are 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 to be eligible for life-sustaining therapy in 2025, 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 to receive 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:

• Osteoarthritis
• 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

Can You Split the Disability Amount with Another Supporter?

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.

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 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 disabled, eligible Canadians.

The Canada Disability Savings Bond:

The Canada Disability Savings Bond offers $1,000 a year to families who make between 30,000 and $55,867 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.

Home Accessibility Tax Credit

The Home Accessibility Tax Credit offers a non-refundable tax credit for qualifying home renovation expenses that enhance accessibility or safety within the dwelling. Proposed changes aim to raise the annual expense limit to $20,000, potentially allowing for a tax credit of up to $3,000.

Canadian Disability Benefit (CDB)

The Canadian Disability Benefit (CDB) is a new federal income supplement for working-age Canadians with disabilities who qualify for the Disability Tax Credit. It aims to reduce poverty and improve financial security by providing direct payments, which will complement existing provincial and territorial programs.

You can read more about the Canadian Disability Benefit here.

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 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 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 2021 to 2025.

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 2021, 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 2021 to 2024. His retroactive refund was $12,552.76.

Louis, 58 from Quebec suffering from Type 1 Diabetes

Louis suffers from Diabetes Type 1, which requires that he be 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 daily 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 2021 to 2024 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. 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 2021  to 2024 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 2018-2024 and his parents received $23,070 in retroactive credits and benefits.

Conclusion

The Disability Tax Credit (DTC) exists to ease financial burdens for Canadians with disabilities by reducing their annual income tax. Despite common misconceptions, the program is not limited to those with severe disabilities—it supports individuals who struggle with daily activities, even if they are still able to work.

Since its inception in 1988, the DTC has provided essential relief to hundreds of thousands of Canadians, yet many remain unaware of the eligibility criteria or the importance of a well-prepared application. Submitting Form T2201 alone does not guarantee approval—clear, thorough documentation is crucial.

This guide is designed to help you navigate the DTC process with confidence. If you need further assistance, our team offers expert support on a no-win, no-fee basis. Get started today with a free assessment!

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:

1. Disability Tax Credit Calculator 
2. Disability Tax Credit Provincial Resources
3. The Definitive Guide to The Child Disability Tax Credit
4. Disability Tax Credit for Arthritis Sufferers
5. Disability Tax Credit for ADHD or ADD
6. Disability Tax Credit for Anxiety Disorders
7. Long-Term Disability Denial and Appeal 
8. Common Medical Conditions Eligible for Long-Term Disability Benefits