The Disability Tax Credit Resource Guide (Updated March 2022)

The Most Comprehensive and Up to Date 2022 Disability Tax Credit Guide. We Cover the Most Recent Info on the Application Process, Eligibility Criteria, T2201 Form, and How To Claim The Credit.
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March 7, 2022 by dccinc

Download The Disability Tax Credit Ultimate Resource Guide - February 2021

NOTE: This Disability Tax Credit Resource Guide has been updated as of March 2022. Ensuring that all the information provided to you is accurate and up to date in accordance with recent changes made by the Canada Revenue Agency (CRA). Specifically, information on the Disability Tax Credit amounts, application process; updated Form T2201, and other relevant information.

The Disability Tax Credit (DTC) Program has been around since 1988, though many Canadians and their medical practitioners still have questions and issues understanding it. Ergo, the DTC is not being taken advantage of by those who are eligible for it. 

To help shed some light on this otherwise under-utilized government tax program we have put together this comprehensive resource guide to make the application process easier to understand and complete. In addition to, informing Canadians of the eligibility criteria and various financial benefits of the program, alongside how to fill out the updated Form T2201.  

It is our goal to help educate and inform our fellow Canadians on the various aspects of the DTC application & approval process. Therefore, we hope that by the end of this guide, you will have a greater understanding on what the DTC is, how to apply, and any additional resources that may be helpful in building a strong case in your favour.

If approved, the DTC will provide you with government refunds in the form of retroactive tax credits, which you are eligible to receive. You could potentially receive up to 10 years of retroactive tax credits, and an annual refund moving forward. Additionally, if your child is the one with the impairment, you may be eligible to receive an additional Child Disability Tax Benefit. Moreover, once approved you will also gain access to different governmental and provincial benefit programs, such as the Registered Disability Saving Plan (RDSP).

PLEASE NOTE: This guide is written based on our expertise and knowledge from years of experience, to make it as accurate and comprehensive as possible! However, this guide is only meant to educate and inform Canadians, it is NOT meant to replace the Canada Revenue Agency’s official documentation on the DTC. Therefore, we ask that you use it wisely!

Table of Contents

1. What Is The Disability Tax Credit?

2. What Is the Disability Tax Credit Eligibility Criteria?

3. How Does The Disability Tax Credit Work?

4. How to Apply For Disability Tax Credit

5. How Do I Fill Out A Disability Tax Credit Form?

6. How Is The Disability Tax Credit Calculated?

7. Common Reason for DTC Denial

8. Once You’re Approved for Disability Tax Credit, What Else Can You Do?

9. Disability Tax Credit Case Studies

10. 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, 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 the 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 being disabled, meaning that you cannot perform basic activities in your daily life, 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 Federal or Provincial?

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 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 DTC, you must:

  1. Be a Canadian citizen or Permanent Resident.
  2. Prove that either you cope with a prolonged impairment, marked restriction, have two or more significant restrictions, or are dependent upon “life-sustaining” therapy.

PLEASE NOTE: Eligibility for the Disability Tax Credit, DOES NOT mean that you will receive any benefits in the form of retroactive tax credits or refunds from the CRA. It is only an indication of the CRA judging your impairment as one eligible to receive the Disability Tax Credit. If you or your supporter did not pay any taxes into the government during the eligibility period, you will not be receiving any money.

How to Determine Your Eligibility for The Disability Tax Credit

The DTC is intended to help people who cope with a prolonged or permanent impairment. The impairment must cause a significant restriction on the person’s ability to carry out ‘activities of daily living’ (ADL).
The ADL, recognized as a vital marker for Disability Tax Credit eligibility in Canada, includes bathing, dressing, walking, carrying, lifting, and other personal care elements.

NOTE: The eligible impairments are generally divided into three main categories. However, it is crucial to understand that the Disability Tax Credit’s eligibility is not based on the diagnosis of the impairment, but rather the severity of the impairment and how it affects your ability to perform ‘activities of daily living’ as described above.

Disability Credit Canada Infographic For Qualifying DTC Conditions

The 3 Main Impairment Categories That Determine DTC Eligibility

There are three main impairment categories, all with different conditions that are eligible for DTC. These three categories are as follows:

  • Physical impairments
  • Mental illness and psychological impairments
  • Neurological impairments

As mentioned previously, being diagnosed with one of the following impairments does not make you eligible for the DTC. Considering, eligibility is based on the severity of the impairment and how it affects your ability to perform ‘activities of daily living.’

This section will cover each category and the common conditions that fall under them, which makes one eligible for the DTC.

Disability Tax Credit Eligibility 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:

Disability Tax Credit Eligibility for Mental Illness & Psychological Impairments

Mental Illness can have consequences on an individual’s ability to accomplish daily tasks. In severe cases, it can affect even a person’s ability to take care of themselves without professional intervention. The CRA considers the following conditions as potentially eligible impairments for the Disability Tax Credit:

Disability Tax Credit Eligibility 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.
    •  
For example:

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 A Disability Tax Credit Eligibility Marker

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).

While the term “life-sustaining therapy” may sound daunting, it is recognized as a treatment that takes up a substantial amount of money and time. Therefore, individuals whose lives depend on life-sustaining therapy are subject to receive the non-refundable tax credit to help alleviate the medical expenses, loss of income, etc.

For example:

Louis G, suffers from Type 1 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”

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:

FIND OUT IF YOU ARE ELIGIBLE TO RECEIVE THE DISABILITY TAX CREDIT!

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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 DTC Refund Methods

  1. 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.
  2. 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 DTC’s 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 and the Claimant?

When a person is applying for the DTC, they can be both the disabled and the claimant, but there are many situations where the disabled and claimant are not the same person, so we must understand the difference between both.

The Disabled

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.

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, 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.

IMPORTANT NOTES:
  1. Paying federal taxes is NOT an eligibility criterion for the DTC as it is not based on your income rather your impairments.
  2. 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)
  3. 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

Disability Credit Canada, Infographic For How To Complete A DTC Application.

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 which 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:

  1. Download the T2201 Form directly from the CRA’s website. There they offer two versions of the Form:
    • The first is a simple PDF version (t2201-21e.pdf), which can be printed and taken to your medical practitioner.
    • The second is a fillable PDF version (t2201-fill-21e.pdf), which can be filled out and certified directly from your computer or your doctor’s.
  2. Complete the individual section, Part A of the form, then take it to your health care practitioner to fill out, and commission Part B.
  3. 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 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 to 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:

  1. 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.
  2. 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.

Disability Credit Canada Infographic, For How To Apply For The DTC.

Although, there are many benefits to working with a specialized DTC firm (like Disability Credit Canada), for instance:

    1. A specialized Disability Tax Credit Firm has a strong understanding of the eligibility criteria and the specific CRA requirements for various disabilities.
    2. 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.”
    3. 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.
    4. 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.
    5. 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.
    6. 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 has 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, 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 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:

Part A

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.

Part B

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 regards 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, 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:

Medical Practitioner
Can Certify

Medical Doctor

All Impairments

Nurse Practitioner

All Impairments

Optometrist

Vision

Audiologist

Hearing

Occupational Therapist

Walking, feeding, dressing

Physiotherapist

Walking

Psychologist

Mental function necessary for everyday life

Speech-Language Pathologist

Speaking

 
IMPORTANT NOTES:

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: 

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:

  1. 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.
  2. 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.
  3. 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!

Get a free assessment

 

How is the Disability Tax Credit Calculated?

Calculating the Disability Tax Credit and understanding how much money you will receive at the end of the DTC process can be a daunting task for the average person who is not an accountant or a bookkeeper. To simplify it, one must understand that the DTC comprises a “Base Amount” and, where applicable, a “Supplemental Amount.”

Furthermore, the “Base Amount” and “Supplemental Amount” portions are given from both federal and provincial sources:

  • The federal DTC portion is 15% of the disability amount for that tax year.
    • The “Base Amount” maximum for 2021 is $8,662, according to CRA’s Indexation Chart.
    • The supplemental amount for children with disabilities is a maximum of $5,053 (2021), According to the CRA’s Indexation Chart.
  • The provincial DTC portion is approx. 10% (percentage varies from province to province) of the disability amount for that tax year.

What is the Disability Tax Credit Base Amount for 2021

If the eligible person is an adult, he/she will receive the federal and provincial “Base Amount” ONLY. For example:

  • The federal disability amount for 2021 is $8,662, and 15% of that is $1,299.30
  • The provincial disability amount in Ontario for 2021 is $8,790, and 10% of that is $879

Therefore, a DTC eligible adult in Ontario would have received $1,299.30 + $879 = $2,178.30

What is the Disability Tax Credit Supplemental Amount for 2021

If the eligible person is under 18 years of age at the end of the tax year, then he/she will be eligible to receive the “Base Amount” as well as the “Supplemental Amount.”

For example:
  • The federal supplemental disability amount for 2021 is $5,053 and 15% of that is $757.95
  • The provincial supplemental disability amount is for 2021 is $5,127 and 10% of that is $512.70

Therefore, a DTC eligible MINOR in Ontario would have received:

  • “Base Amount” as calculated above of $2,178.30
  • “Supplemental Amount” of $757.95 + $512.70 = $1,270.65

If we add “Base Amount” and “Supplemental Amount,” we will see that an eligible person under 18 years of age in Ontario would receive $3,448.95 in Disability Tax Credits for the 2021 tax year.

To make it even easier to understand and to be able to calculate the approx. 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.

To summarize, to calculate the total amount of DTC you stand to receive, you need to multiply the number of years by the amount per year.

Calculating Your 10 Year Retroactive DTC 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 2021 and prior years, including a maximum supplement for children with disabilities

The following Disability Tax Credit amounts have been updated as of February 2021 to ensure all numbers are up to date and relevant.

Year
Maximum Disability Amount
Maximum Supplement For Persons Under 18
2021 $8,662 $5,053
2020 $8,576 $5,003
2019 $8,416 $4,909
2018 $8,235 $4,804
2017 $8,113 $4,733
2016 $8,001 $4,667
2015 $7,899 $4,607
2014 $7,766 $4,530
2013 $7,697 $4,490
2012 $7,546 $4,402
2011 $7,341 $4,282
2010 $7,239 $4,223
2009 $7,196 $4,198

 

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 clients’ best interest 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 there 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 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 around 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 which 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 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, 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.

Conclusion

The Disability Tax Credit’s purpose is to reduce the amount of income tax Canadians with disabilities and/or their families and supporters would have to pay annually TO assist with the various financial implications and medical expenses of having a disability or a substantial impairment.

Many Canadians believe that the tax credit is exclusively for those who are severely disabled. However, the program was created for those who struggle with activities of daily living but are still capable of working. 

Another common misconception surrounding the tax credit is that you are deemed disabled if eligible, creating a stigma around DTC in the process. While the program is a disability benefit, being accepted for it does not imply that you are disabled, as mentioned previously, the tax credit is for those who are still working but require additional assistance. 

It is also important to note that many are not aware of the qualifying criteria and believe that simply submitting the T2201 form is enough to be approved for the tax credit. Instead, you must carefully and thoroughly build your case to ensure that as much information about your debilitating condition is included, along with evidence that backs up your claims. 

We have created this guide to help Canadians better understand DTC to apply on their own. This guide has covered applying, eligibility, additional benefits, differing options for applying and the positives and negatives of each, how much you could stand to earn, and much more. Our goal is to create the most comprehensive guide available so you can apply to DTC with confidence.  

We hope that we have provided you with all of the information you need to get started on your application. We provide our extensive knowledge on a NO WIN-NO FEE basis for any additional assistance, so sign up for our free consultation today and get the aid you are entitled to!

At Disability Credit Canada, we take pride in helping Disabled Canadians claim CPP-Disability Benefits, Disability Tax Credit, and Long Term Disability (LTD) Benefits. Check out some of our other resources!

 

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