Alberta Disability Tax Credit Calculation, Eligibility and Application

If you or a family member is among the nearly 400,000 disabled individuals residing in Alberta, chances are you’ve stumbled upon this guide in search of insights into the Disability Tax Credit.

Updated and revised in February 2024, the following Alberta Disability Tax Credit guide reflects changes to the Disability Tax Credit application form, refund amounts, and any other queries you may have. Specifically curated for Alberta residents, this guide aims to comprehensively address all aspects of how the Disability Tax Credit (DTC) can help alleviate the financial strain of living with disabilities.

From covering expenses such as treatments, medications, and specialized education to providing the most up-to-date information on eligibility criteria and application processes, consider this your go-to resource.

Essentially, the Disability Tax Credit serves as a federal benefit designed to reduce yearly income tax obligations and may even offer retroactive payments if you or a family member has endured a severe condition for an extended period. While this guide covers essential information for Alberta applicants, for a deeper understanding of the tax refund process, we offer detailed insights in our comprehensive Disability Tax Credit guide.

If found eligible for the Disability Tax Credit, you can receive a substantial refund from the government. There are 2 types of refunds you can receive:

Adult Disability Tax Credit:

• A 10-year retroactive, one-time lump sum amount of up to $27,350
• An annual refund of up to $2,000

Child Disability Tax Credit

• A 10-year retroactive, one-time lump sum amount of up to $40,000
• An annual refund of up to $4,000

We believe it is worth your while to read and learn about the Disability Tax Credit therefore throughout this article, we will cover:

• How much a person in Alberta can receive from the Disability Tax Credit
• Eligibility criteria for the Disability Tax Credit.
• Other disability benefits or programs available in Alberta.

This guide covers the Disability Tax Credit, and specifically what those living in Alberta need to know when applying. However, if you would like a deep dive into the tax refund, check out our comprehensive Disability Tax Credit guide.

PLEASE NOTE: This guide has been written based on our extensive knowledge and years of industry experience to ensure its accuracy and comprehensiveness in 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!

 

What is The Disability Tax Credit?

The Disability Tax Credit is a non-refundable tax credit created by the Canadian Government and Canada Revenue Agency to assist those with disabilities who work and pay federal income tax. It was created to alleviate the additional costs of disabilities by reducing the amount they must pay on their taxes.

• The Disability Tax Credit is available to those who:
  Have extreme difficulty performing ‘activities of daily living.’
  Have contributed to federal taxes during the year they are applying.

The Disability Tax Credit is also available to families with disabled children under 18 through the Child Disability Tax Credit and the Child Disability Benefits.

To learn more about the Child Disability Tax Credit, check out our in-depth guide.

Who is Eligible for the Disability Tax Credit?

Now that you know what the Disability Tax Credit is, you are probably wondering: “Am I eligible?.”

There is no easy answer as the CRA considers many things when determining if an individual is eligible for a tax refund. Many believe that they’re eligible simply because they were diagnosed with an impairment – this, however, is not the case.

Having been diagnosed with an impairment is not enough to qualify for the Disability Tax Credit, you must prove to the CRA that your impairment is severe enough to cause a significant impact on the activities of your daily life

How to Determine the Disability Tax Credit Eligibility?

Determining if you are eligible for the DTC comes down to several factors. First, you must find out if your condition is within the eligibility criteria. Second, you must find out whether your condition is severe enough to qualify.

To determine if you qualify for the DTC, see if your condition falls under the following criteria:

The three main categories that are used to determine eligibility for DTC are:

• Physical Impairments
• Mental Illness and Psychological Impairments
• Neurological impairments

It is imperative to note that just because your condition is considered eligible for DTC, it does not mean that you will receive the tax refund. Eligibility is based on how severe your impairment is and its effects on your activities of daily living.

To be considered eligible for DTC, your impairment must also fall under one of the following:

Markedly Restricted

You are unable to perform the activity, or it takes at least three times longer than someone of similar age without the impairment, even with the use of appropriate therapy, medication, and devices. 

This restriction is present all or almost all of the time, generally at least 90%. Furthermore, the restriction has lasted or is expected to last for a continuous period of at least 12 months.

Life-Sustaining Therapy

If you spend 14 hours each week or more on life-sustaining therapies to support vital functions such as dialysis, insulin therapy, oxygen therapy, and chest physiotherapy, and require these therapies at least 2 times per week, you may be eligible for the Disability Tax Credit (DTC) under life-sustaining therapy.

To learn more, read our Disability Tax Credit Eligibility article.

What are the Benefits of Disability Tax Credit?

While the DTC does offer you and your family financial benefits through retroactive payments and annual refunds, it also opens the door for many other programs.

For an eligible adult, financial benefits can be around $1,500-$2,000 per year, and a child’s caregiver can receive as much as $4,000 per year in credits and refunds.

If found eligible for the DTC, you may also be eligible for additional programs and services, such as:

• Registered Disability Savings Plan (RDSP)
• Canada Disability Savings Bond
• Canada Disability Savings Grant

How Is The Disability Tax Credit Calculated?

Now that you understand eligibility and believe you may be eligible for the tax refund, you are most likely curious about how much you can receive. This section will break down how the DTC is calculated; however, if you would like an estimation right away, we created a Disability Tax Credit Calculator where you can quickly and very accurately estimate your expected refunds.

Here is a breakdown of how the DTC refund is calculated:

The DTC refund amount consists of a Federal amount and a Provincial amount The Federal amount is the same across Canada, and the Provincial amount changes from Province to Province.

The Federal and Provincial amounts consist of a ‘Base Amount’ and, if applicable, a ‘Supplemental Amount.’ The Supplemental Amount is provided to eligible individuals who are under 18 years of age at the end of the tax year. We’ll further explain these components below:

• Base Amount:
  The Federal base amount is around 15% of the base amount ($9,428 as of 2023), equating to about $1,414.2.
  The Provincial base amount is around 10% of the disability amount for that tax year ($16,201 as of 2023), equating to about $1,620.1.
• Supplemental Amount:
  The Federal supplemental portion is 15% of the base amount ($5,500 as of 2023), equating to about $825.
  The Provincial supplemental portion is around 10% of the disability amount for that tax year ($12,158 as of 2023), equating to about $1,215.8.

Therefore, the base amount from both Federal and Provincial sources is around $3,034.3, and the supplemental amount from both Federal and Provincial sources is approximately $2,040.8.

Based on the calculation example above, an adult in Alberta would receive approximately $3,034.3 for the year 2023. When combining the “Base Amount” and “Supplemental Amount,” an eligible individual under 18 in Alberta would receive 5,075.1 in Disability Tax Credits for the 2023 tax year.

Here are the Federal and Provincial base and supplemental amounts for the past 10 years:

Federal Base amount and Supplement amount table for last 10 Years

Year	Federal Base Amount	Federal Supplement amount
2013	$7,697	$4,490
2014	$7,766	$4,530
2015	$7,899	$4,607
2016	$8,001	$4,667
2017	$8,113	$4,733
2018	$8,235	$4,804
2019	$8,416	$4,909
2020	$8,576	$5,003
2021	$8,662	$5,053
2022	$8,870	$5,174
2023	$9,428	$5,500

Alberta Provincial Base and Supplement amount table for last 10 Years

Year	Provincial Base Amount	Provincial Supplement amount
2013	$13,571	$10,184
2014	$13,720	$10,296
2015	$14,050	$10,545
2016	$14,232	$10,680
2017	$14,417	$10,819
2018	$14,590	$10,949
2019	$14,940	$11,212
2020	$14,940	$11,212
2021	$14940	$11,212
2022	$15,284	$11,470
2023	$16,201	$12,158

How to Apply for the Disability Tax Credit

Now that you’re aware of the potential earnings from the DTC, let’s delve into the application process. The good news is that applying for the DTC is simple, straightforward, and completely free. Anyone can apply, and there are no drawbacks or penalties for making multiple attempts.

However, securing approval for your DTC application requires more than just submitting it and hoping for the best. You’ll need to construct a strong case, providing comprehensive information about your condition and how it adversely affects your life.

Various application methods yield different outcomes, so it’s essential to review your options and determine which suits you best.

Applying for the Disability Tax Credit Independently

To apply for the DTC, all you must do is take the following steps:

• Download the T2201 Form from the CRA’s website
• Print the T2201 and take it to your healthcare practitioner to fill out and sign.
• Send the signed T2201 by mail to the CRA’s processing centre.

While applying for the DTC independently is the most cost-effective method, it does not give you the best chance for approval. Drawbacks to applying independently include a lack of eligibility knowledge and a need to know how to maximize your applicable credits and benefits.

Because of this, it is best to enlist the help of a specialized DTC firm like Disability Credit Canada, as we have a thorough understanding of the DTC application process, eligibility requirements, and more.

Common Reasons for Denial of the Disability Tax Credit

Before applying it is essential to note that a large percentage of applicants get denied so it is important to understand some of the common reasons people are denied for the DTC if you want to avoid making the same mistakes.

As previously mentioned, applying for the DTC is a simple process, but being approved is not. The application process for severe or more visible impairments is rather simple, but the process becomes much more challenging for less visible or hard-to-diagnose impairments.

Throughout our many years of dealing with DTC cases, we have come across many different reasons applications are denied. Some are straightforward, while others can be complex. Here are some of the more common reasons:

• Missing or incomplete information on the T2201 form
• Lack of knowledge of DTC eligibility criteria
• Inconsistent medical diagnosis
• Impairment didn’t qualify
  Duration of impairment too short
• Cumulative effects of impairment not included
• Lack of supporting medical documents to prove the severity of your condition

Other Disability Programs Offered in Alberta

On top of Disability Tax Credit, many other disability programs are available to eligible inhabitants of Alberta.

Alberta Aids to Daily Living (AADL) helps Albertans with long-term disability benefits or chronic/ terminal illnesses pay for essential medical equipment and supplies.

Assured Income for the Severely Handicapped (AISH) provides financial and health benefits for eligible Albertans with a permanent medical condition that prevents them from earning a living.

Post-Secondary Grants for Students with Permanent Disabilities supplies funding and grants available for students with permanent disabilities.

In Conclusion

We’ve crafted this guide to inform Albertans about the Disability Tax Credit and how it aids disabled Canadians who are still in the workforce by offering financial assistance to cover expenses related to their impairments. Applying for the credit is completely free, and there are no consequences for applying multiple times.

Disability Credit Canada has assisted thousands of Canadians in qualifying for and maximizing the benefits of the Disability Tax Credit. Our dedicated and knowledgeable team is committed to ensuring the successful completion of every application we handle.

We provide free assessments and operate on a NO WIN – NO FEE basis, meaning we only receive payment if you do, giving us the incentive to secure the maximum refund for you!

For the best chance of approval for the Disability Tax Credit, call us today at 1-844-800-6020.

Call us today for help with your disability tax credit in Alberta