A recent study has shown that nearly 15% of Canadians live with an impairment or a disability of some kind. There are over 14 million residents in Ontario alone, with about 2.1 million living with a disability. If you live in Ontario, you or someone you know is likely to have an impairment. Because of this, we believe that it is imperative for you to learn about the Disability Tax Credit and what it can do for you.
We have created this specific Ontario Disability Tax Credit guide to shed some light on the Disability Tax Credit (DTC) program and help Ontario residents with impairments learn all about the DTC. Throughout this guide, we will explain the program, how to apply, the eligibility criteria, and other relevant information for those living in Ontario.
You may ask yourself: “Is it even worth it to apply for the Disability Tax Credit”? – We believe so.
Eligible adults can receive around $2,000 per year, while those caring for a child under 18 with an impairment can receive about $4,000 per year.
Also, if you can prove to the CRA that your impairments have been affecting your life for years, once found eligible, the CRA will reassess your tax returns. You can then receive a lump sum retroactive payment of up to $20,000 (for an adult) and up to $40,000 (for a child).
For any Ontarian’s looking to apply for DTC for themselves or someone they are caring for, we break down everything you need to know when applying in Canada’s most populated province.
This guide will cover everything someone in Ontario needs to know when applying for DTC, but to learn more, we cover the tax refund in-depth in our comprehensive Disability Tax Credit guide.
FIND OUT IF YOU ARE ELIGIBLE TO
RECEIVE THE DISABILITY TAX CREDIT!
The Disability Tax Credit Explained – What is the DTC?
The Disability Tax Credit is a non-refundable federal tax credit created by the Canadian Government and Canada Revenue Agency to assist those with impairments that still work and pay taxes by providing them with a refund on the Federal income tax they pay.
The Disability Tax Credit was created in 1988 when disabilities and mental illnesses became more recognized. The creation of DTC came about when the definition of a disability became broader and started covering numerous physical handicaps and mental illnesses instead of just those who use wheelchairs or are blind.
What are the Financial Benefits of the Disability Tax Credit?
There are several financial benefits to the DTC, including:
- Retroactive one-time refund: If you can prove that your impairment has been present for the past few years and you have been working and paying taxes, you can stand to receive a retroactive payment for each year you’re found eligible for up to 10 years in a one-time lump sum.
- Adults: Each year you’re found eligible, you could receive about $2,000 per year, so if you get approved for the full 10-year retroactive refund, you stand to receive up to $20,000.
- Minors/Children: If you care for a child under 18, you could receive up to $4,000 per year, meaning a full 10-year retroactive refund could be as high as $40,000.
2. Annual refund: If found eligible for DTC, you can claim a yearly DTC refund when doing your taxes. An eligible adult can receive around $1,500-$2,000 per year, and a child’s parent/caregiver can receive up to $4,000 per year in credits and refunds.
3. RDSP: If found eligible for the Disability Tax Credit, the disabled person is automatically eligible (some restrictions apply) to open a registered disability savings plan (RDSP). The RDSP is a Canadian Government savings plan similar to the RESP that helps Canadians with disabilities save for long-term financial security.
How to Calculate the Disability Tax Credit in Ontario
In the following section, we will explain how the DTC is calculated; however, to save you time, we created a Disability Tax Credit Calculator where you can easily and very accurately estimate your expected refunds.
To understand how the DTC refund is calculated, you need to understand a few “basic” terms:
- The DTC refund amount consists of two amounts: Federal amount and Provincial amount.
- The Federal amount is the same across Canada.
- The Provincial amount changes from Province to Province.
2. The Disability Tax Credit is comprised of a “Base Amount” and a “Supplemental Amount,” if applicable.
- The Federal base amount is around 15% of the base amount ($8,576 as of 2020), equating to about $1,286.40.
- The Provincial base amount is around 10% of the disability amount for that tax year ($8,712 as of 2020), equating to about $508.10.
Therefore, the base amount from both Federal and Provincial sources is around $2,157.60
- The Federal supplemental portion is 15% of the base amount ($5,003 as of 2020), equating to about $750.45.
- The Provincial supplemental portion is around 10% of the disability amount for that tax year ($5,081 as of 2020), equating to about $508.10.
Therefore, the supplemental amount from both Federal and Provincial sources is around $1,258.55.
Here are some examples of Disability Tax Credit refunds you could receive::
Federal Base amount and Supplement amount table for last 10 Years
|Year||Federal Base Amount||Federal Supplement amount|
Ontario Provincial Base and Supplement amount table for last 10 Years
|Year||Provincial Base Amount||Provincial Supplement amount|
What is The Eligibility Criteria for Disability Tax Credit
Before discussing DTC eligibility criteria, we must dispel a significant misunderstanding:
When the Canada Revenue Agency (CRA) evaluates your DTC application, they’re most interested in the way your impairments affect your “Activities of Daily Living” (ADL). They want to know the various ways your everyday activities are affected by your condition.
While they are interested in your diagnosis, as you must have an eligible impairment to be qualified, they will be more focused on the effects your impairment has on your “ADL.”
There are three main categories that the majority of conditions that are eligible for DTC fall under, including:
- Physical impairments
- Mental illness and psychological impairments
- Neurological impairments
To be found eligible, your condition must be considered markedly restricted, meaning you cannot perform or take an inordinate amount of time to complete two or more activities of daily living (ADL).
You may also be eligible if the restrictions caused by your condition affect you 90% of the time, OR a combination of two or more moderate restrictions of ADLS adds up to 90%.
Finally, if you spend 14 hours a week or more on life-sustaining therapy, such as insulin therapy, physiotherapy, or dialysis, you may also be eligible. Life-sustaining therapy makes one eligible for DTC due to the substantial amount of money and time they must spend tending to their condition, leading to many additional fees for treatments and medical devices.
To learn more, visit our Disability Tax Credit Eligibility article.
Step-by-Step Instructions on How to Apply for DTC
Over the years, the CRA has simplified the Disability Tax Credit application process to serve Canadians as initially intended. However, even after streamlining the application process, many applicants are still denied for a myriad of reasons.
It is important to note that just because applying for the DTC is easy, getting your DTC application approved is difficult.
Some disabilities are “visible” and “obvious” – these applications get approved pretty quickly. However, some disabilities, especially “invisible” mental disabilities, are much harder to prove. Most applicants will be denied, so getting approved for impairments that sit in a ‘grey area’ can be very difficult and require a lot of evidence gathering to help legitimize your claim.
In essence, the Disability Tax Credit application process is simple and straightforward:
- Download the T2201 Form from the CRA’s website.
- Print the T2201 and take it to your health care practitioner to fill out and sign.
- Send the signed T2201 by mail to a CRA’s processing centre or even online.
- Wait about 1-3 months to hear back from the CRA if you were approved or not.
To fill out the T2201 form, you will need it to be certified by a medical practitioner; however, not just any medical practitioner has the authority to do so. The CRA may also send a questionnaire to the medical practitioner who signed your form to clarify your impairments and the information submitted.
Some of the medical practitioners that can fill out the T2001 form are:
- Medical doctors can fill out the entirety of part B of the T2001 form.
- Nurse practitioners can fill out the entirety of part B of the T2001 form.
- Specialized doctors can fill out the section that best applies to their field, such as an optometrist filling out the vision impairment section, etc.
Here is a full list of medical practitioners authorized to fill out form T2201.
Applying independently can be a quick and cost-effective process, but for more complex cases or cases that have been denied, you may want to seek out the help of a specialized DTC firm, like Disability Credit Canada.
Common Reasons for DTC Denial
As mentioned above, applying for DTC is easy, but being approved is not a simple task. If you have a severe impairment, the application process can be easy and straightforward, but if your disability is less visible or hard to diagnose, the process becomes much more challenging.
Throughout our many years of experience, we have seen many reasons applications are denied. Some reasons are simple and straightforward, while others can be complex.
Some of the more common reasons for your application’s denial include:
- Missing or incomplete information on 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.
If your application is denied, you still have some options, such as:
- Appeal the CRA’s decision by raising a formal objection.
- Submit a new T2201 form with further information about your impairments.
- Use a different medical practitioner with more knowledge about DTC eligibility criteria.
- Call/write the CRA for further clarification regarding your application.
The Child Disability Tax Credit & Child Disability Benefit Explained
The Disability Tax Credit application process, eligibility criteria and other aspects are identical whether you’re an adult or a child. However, the main difference between the two is that the Child DTC refund is calculated after you’re found eligible rather than before.
The child’s caregiver applying MUST pay federal taxes, as that is where the DTC refund comes from. Therefore, if you or your claimant don’t pay any Federal taxes, you can not receive a DTC refund.
An eligible child may receive one or both of the following refunds:
- Federal Tax Refund – If the impaired child’s supporter has paid into Federal income taxes, they will receive the same amount an adult claimant would.
- Child Disability Benefits – If the supporter has not paid into Federal income tax, they will only receive the Child Disability Benefits to care for the impaired child.
More importantly, Parents or guardians of an eligible child don’t have to pay federal taxes to receive a refund.
To learn more about the Child Disability Tax Credit, check out our in-depth guide.
What are Other Disability Programs Available for Ontario?
The Disability Tax Credit is a federal program and it’s important to know that if you were found eligible for the DTC it will not affect other Federal or Provincial programs.
If you’re in Ontario and living with an impairment, there are other programs created to assist you. It is advantageous to learn about your options to get the assistance you or someone you are caring for needs.
Some of the other disability programs available to Ontarians are:
Ontario Disability Support Program (OSDP) was created to help disabled Ontarians with basic needs and shelter, providing up to $1169 a month. OSDP can also provide additional support if you need transportation to medical appointments or have other immediate family members.
Assistance for Children with Severe Disabilities provides financial help to parents caring for a child under 18 years old with a severe disability.
Assistive Devices Program helps pay for special equipment and supplies for those with a long-term physical disability.
Home and Vehicle Modification Program provides money to help with the cost of making a home or vehicle more accessible for those with a disability that restricts mobility.
The Disability Tax Credit helps disabled individuals who want to continue to work by providing additional support to help with the additional expenses created by their impairment. There is no cost associated with applying, and you can apply as many times as needed – so apply today and discover if you qualify for Disability Tax Credit in Ontario.
Call us today for help with your disability tax credit in Ontario.
After found eligible for 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
A retroactive refund can be upwards of $20,000 for an adult and up to $40,000 if the person found eligible is under 18. To be found eligible for previous years, the DTC will examine how long you have been diagnosed or how long you have experienced symptoms for the qualifying disabilities.
Ontario Disability Support Program Dental Care supplies dental services like oral exams, x-rays, fillings, and extractions.
Ontario Drug Benefit Program can cover the cost of your prescription.
Trillium Drug Program If you have high prescription drug costs and a low household income, you may be able to pay $2 or less for every prescription.
At Disability Credit Canada, we take pride in helping disabled Canadians claim CPP Disability Benefits & Disability tax credit. Check our other Resources for more information on Disability Tax Credit.
- Disability tax Credit Provincial Resources
- The Definitive Guide to The Child Disability Tax Credit
- Disability Tax Credit for Arthritis Sufferers
- Disability Tax Credit for ADHD or ADD
- Disability Tax Credit for Anxiety Disorders