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Newfoundland and Labrador Disability Tax Credit Information

April 19, 2024 by dccinc

It’s estimated that a staggering 20% of the Newfoundland and Labrador population, over 100,000 residents, live with an impairment of some kind. If you or a family member are among them, we’re here to assist by shedding light on the Disability Tax Credit program and how it operates, particularly in the context of Newfoundland and Labrador.

In essence, the Disability Tax Credit (DTC) is a non-refundable federal tax credit designed to reduce the tax burden for disabled individuals. Its purpose is to alleviate the various costs associated with living with an impairment, such as treatments, medication, special education programs, and other additional expenses.

We’ve developed a specific Newfoundland and Labrador  Disability Tax Credit guide to provide insight into the DTC program and assist Newfoundland and Labrador residents with impairments in navigating the application process. Updated and revised in February 2024, this Newfoundland and Labrador Disability Tax Credit guide reflects changes to the Disability Tax Credit application form, refund amounts, and any other questions you may have. Specifically curated for Newfoundlanders, 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. While this guide covers essential information for Newfoundland and Labrador applicants, for a deeper understanding of the tax refund process, we offer detailed insights in 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 that the Canadian Government and Canada Revenue Agency created to alleviate the financial burden for those with disabilities by reducing the amount of income tax they pay. If the person found eligible is under 18 at the end of the year, DTC will also provide extra credit/refund (supplement).

To be considered eligible for DTC, you must demonstrate difficulty performing activities of daily living like walking, feeding yourself, hearing, speaking, or other debilitating conditions that affect day-to-day living.

The amount received from the tax credit comes from both Federal and Provincial sources. The Federal amount is the same across the country, but the Provincial amount differs from Province to Province.

After being 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.

A later section will illustrate how to calculate the Newfoundland and Labrador Provincial disability amount given to those accepted for the Disability Tax Credit

What is the Child Disability Tax Credit and the Child Disability Benefit?

The Child Disability Tax Credit is the same as a regular adult Disability Tax Credit – both the eligibility criteria and application process are identical. The main difference between an adult DTC and a child DTC happens at the refund calculation stage as it is done AFTER the person is found eligible.
If an adult is found eligible for the DTC, they will get a refund based on the amount of federal taxes paid. If a child (under 18) is found eligible for the DTC, their supporters (parents or guardians) may receive two different refunds:

1. Refund on federal taxes paid: If the supporter of the impaired child has paid into taxes, they will receive the same credits/refunds as an adult claimant would.
2. Child Disability Benefits: Regardless of whether the supporter has paid taxes, they will receive the Child Disability Benefits to assist in caring for the impaired child.

The Child Disability Benefit (CBD) directly helps Canadians raise their children with impairments, meaning you can still receive CDB even if you have no taxable income for the year. It is a supplemental benefit added to Canada Child Benefit’s base if the disabled individual is below 18 years of age.

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

Who is Eligible for Disability Tax Credit?

Many Canadians are unaware of their Disability Tax Credit eligibility as they believe that they are only available to those who are severely disabled. To qualify for Disability Tax Credit, you must prove that your mental, neurological, or physical impairment is severe enough to cause a significant impact on your daily life and prevent them from supporting you and your family.

The Three Main Impairment Categories that Determine the DTC Eligibility

There are three main categories, all with numerous associated conditions, that are used to determine eligibility for DTC, those being:

1. Physical Impairments
2. Mental Illness and Psychological Impairments
3. Neurological impairments

Even if you are diagnosed with one of the following impairments, you are not automatically eligible for DTC. Eligibility is based on the severity of your impairment and its effects on your ‘activities of daily living.’

Activities of daily living or ADLs refer to the basic self-care activities done daily and are fundamental in caring for oneself and maintaining independence.

To be considered eligible for DTC, your impairment or disability must seriously affect the consistency and brevity of one or more of your ADLs’ performance.

“Markedly Restricted” as it Pertains or to Eligibility for DTC

Markedly restricted is a term often used when considering if one is eligible for DTC. Here are some examples of what being markedly restricted means: 

• Cannot perform or take an inordinate amount of time (three times longer than an abled person of the same age) one or more activities of daily living, even after medication, treatment, or technological aid. 
• Restrictions caused by the impairment must be present 90% of the time or more – or if a combination of two or more moderate restrictions like walking or dressing cumulatively adds up to 90% of the time, it would also be considered markedly restricted.

Life-Sustaining Therapy as a Disability Tax Credit Eligibility Marker

Another term often used when determining DTC eligibility is life-sustaining therapy. The term life-sustaining therapy in the context of DTC eligibility refers to someone spending 14 hours or more each week on life-sustaining treatments, such as insulin therapy, chest physiotherapy (helps with breathing), and kidney dialysis (blood filter).

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

What are the Benefits of the Disability Tax Credit?

The DTC can offer substantial financial help to individuals and families in Newfoundland and Labrador, but also, if found eligible for the DTC, one can tap into other programs.

The direct financial benefits for an adult resident can be around $1,500~$2,000 per year, and the child’s parents can receive as much as $4,000 per year in credits and refunds.

You may also qualify 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 in Newfoundland and Labrador Calculated?

If you’re 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.

You can also stand to make upwards of $20,000 as an adult and up to $40,000 if under 18 through a retroactive refund. The CRA will examine your DTC application to see how long you have been diagnosed or experiencing symptoms of the qualifying disabilities; they can then 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.

Calculating how much you can make through the retroactive payment is simple – you take how much you stand to earn each year through DTC and multiply that by how many years of retroactive payment you have been approved for.

To calculate your DTC refund, you should first understand what the Disability Tax Credit consists of.

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:

We have provided the amounts and examples of what you could save due to DTC’s tax break.

Federal Base amount and Supplement amount table for last 10 Years

Newfoundland and Labrador Base and Supplement Amount Table for Last 10 Years

The DTC is comprised of a “Base Amount” and, where applicable, a “Supplemental Amount,” both of which come from federal and provincial sources:

The federal DTC portion is 15% of the disability amount for that tax year.

According to the CRA’s Indexation Chart, the “Base Amount” maximum for 2023 is $9,428, and the supplemental amount for children with disabilities is a maximum of $5,500.

The provincial DTC portion is approx. 10% (percentage varies from province to province) of the disability amount for that tax year. If the eligible person is an adult, they will receive the federal and provincial “Base Amount” ONLY. For example:

Newfoundland and Labrador DTC Calculations for Adult

The federal disability amount for 2023 is $9,428, and 15% of that is $1,414.2

The provincial disability amount in Newfoundland for 2023 is $7,005, and 8.7% of that is $609.43

Therefore, a DTC-eligible adult in Newfoundland would have received $1,414.2 + $609.43 = $2,023.63

Newfoundland and Labrador DTC Calculations for Child

If the person eligible for DTC is under the age of 18 at the end of the tax year, they will be eligible for the  “Base Amount” as well as the “Supplemental Amount.”

The federal supplemental disability amount for 2023 is $5,500, and 15% of that is $825

The provincial supplemental disability amount for 2023 is $3,297, and 8.7% of that is $286.83

Therefore, an eligible minor in Newfoundland and Labrador would receive:

“Base Amount” as calculated above of $2,023.63

“Supplemental Amount” of $825 + $286.83 = $1,111.83

If we add “Base Amount” and “Supplemental Amount,” we will see that an eligible person under 18 years of age in Newfoundland and Labrador would receive $3,135.46 in Disability Tax Credits for the 2023 tax year.

How to Complete Your Disability Tax Credit Application

It is important to note that Applying for Disability Tax Credit is free, it can be done by any Canadian as many times as they want. All you need to do is download the Disability Tax Credit Form (T2201), print it out, take it to your doctor to certify (the medical practitioner usually charges anywhere from $50 to $150), and once certified, send it to the CRA.
The DTC application process as described above is straightforward and can be done in a few short steps. However, applying and qualifying are two different things. Applying is easy and simple, qualifying is not so easy and a large percentage of applicants do get denied for a multitude of reasons.
In general, there are three main routes you can follow when applying for the DTC:

Completing the Disability Tax Credit Application Independently

Applying independently can be done by simply completing 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.

The benefit of applying alone is that it is cost-effective. However, there are many drawbacks to applying alone, such as limited knowledge of eligibility, lack of knowledge of DTC in general, and inability to maximize returns.

Completing the Disability Tax Credit Application with the Help of An Accountant or a Bookkeeper

You can also enlist others to assist you in completing your Disability Tax Credit application, such as an accountant or a bookkeeper, both of whom will be reasonably familiar with the tax credit and will charge very little.

Both the benefits and drawbacks that come with applying independently are also prevalent when applying with the help of an accountant or bookkeeper, meaning minimal fees at the expense of limited knowledge.

Completing the Disability Tax Credit Application with the Help of a DTC Firm like Disability Credit Canada.

DTC firms handle each step of the process, have extensive knowledge, and work on a NO WIN, NO FEE basis – meaning they are incentivized to get you the most out of a DTC refund as possible.

As mentioned previously, applying to DTC is easy, but being approved can be very difficult. You need to carefully and thoroughly build a case that portrays your condition and the impairments that come with it, so hiring a team with extensive knowledge like a DTC firm is the best way to ensure your application is approved.

To learn more about each option for applying to DTC, check our Disability Tax Credit Application Process guide.

Common Reasons for DTC Denial

Not all cases are straightforward. A majority of DTC applicants will fall into a “gray area” where they may have qualifying impairments, but they are not enough to make them eligible for the program. Because of this, a majority of DTC applications are denied.

There are numerous reasons one could be denied for DTC, some much more clear-cut than others. Here are some of the most common reasons for denial when filling out your DTC form to give you a good idea of what to avoid when filling out your DTC form.

• Missing or incomplete information on the t2201 form.
• Lack of knowledge of DTC.
• 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.

To learn more about the various reasons for DTC denial check out our comprehensive Disability Tax Credit Resource guide.

What are Other Disability Programs Available for Newfoundland and Labrador?

On top of the Disability Tax Credit, many other disability programs are designed to help disabled and impaired Newfoundland and Labrador inhabitants.

Some examples of some of the disability programs available are:

• The Coalition of Persons with Disabilities – Newfoundland and Labrador is a charitable, not-for-profit organization to inform, educate, and build awareness of issues surrounding disability.
• The Newfoundland & Labrador Association for Community Living (NLACL) is a not-for-profit organization that works with and on behalf of persons with intellectual disabilities in Newfoundland and Labrador, creating initiatives to help individuals with intellectual disabilities as well as their families and communities.
• Programs Funded through the Department of Health and Community Services offer numerous benefits and programs to help disabled Newfoundland and Labrador inhabitants find assistance.

In Conclusion

At Disability Credit Canada, we take pride in supporting disabled Canadians in Newfoundland and Labrador through programs like the Disability Tax Credit, designed to alleviate financial burdens while they remain active in the workforce. Applying for this credit is completely free, with no consequences for multiple applications. Our team has helped thousands of Canadians qualify for and maximize benefits from the Disability Tax Credit, CPP Disability Benefits, and Long Term Disability Benefits.

We’ve crafted this guide to inform Newfoundlanders about the Disability Tax Credit, providing essential information on how it assists working individuals with disabilities and their families. Our dedicated and knowledgeable team offers free assessments and operates on a NO WIN – NO FEE basis, ensuring we only receive payment if you do. This approach incentivizes us to secure the maximum refund for you.

Discover which tax savings you’re eligible for today by applying for the Disability Tax Credit in Newfoundland and Labrador. Call us at 1-844-800-6020 for assistance with your application. For more information, check out our other resources on Disability Tax Credit.