The Disability Tax Credit

There are two types of disability tax credits: non-refundable and refundable.  Non-refundable tax credits can reduce tax owed to zero, but can’t be used to get a refund. A refundable credit can reduce your tax below zero and provide you with a refund.

The Disability Tax Credit (DTC) is a non-refundable tax credit, which means that someone who has low or no income will not benefit from this credit. However, the credit is transferable. So someone who qualifies could transfer all or a portion of the DTC to a spouse – legal and common law — who can then reduce his/her tax payable.

A lot of confusion comes from is the fact that the criteria for qualifying for the DTC is not precise.  In 2001, the criteria were expanded to include life sustaining treatments requiring 14 hours per week or more. In 2005 the criteria were expanded further to include the time needed to calculate dosage for medications that require dosage on a daily basis.

To simplify the qualifying criteria, the condition must exist for longer than 12 months, and must markedly affect one or more of the basic functions of life, which include walking, eating,  speaking, and self-care, or require a significant time commitment to manage life sustaining treatments.

You are eligible for the disability amount only if a qualified practitioner certifies that you have a severe and prolonged impairment and it’s effects on the form T2201, and the form is approved. There is a self-assessment questionnaire available on the T2201 form itself, so you can have a look-see to determine if you might qualify.  Also on the form are definitions of “life sustaining treatment” along with other terms. If you believe you may qualify, proceed with an application. No harm is done if you don’t receive approval but tremendous benefits can be claimed if you are.

If you are approved for the DTC, it is usually retroactive and in place for several years. Once approved, claims for the past years are done through a T1 adjustment. In the event that the approved taxpayer does not require the entire credit, an adjustment must also be done for a spouse’s or parent’s return.  These adjustments are processed manually by the tax centre so they may take some time, but they can result in large refunds.

Here are some examples for you:

  • A man and his wife have never applied for the credit.  Based on statements by the husband, their accountant recommended that they request their doctor to complete a T2201 form to apply for the DTC based on the wife’s deteriorating condition due to dementia/Alzheimers. The husband was reluctant due to the fact that his wife was in denial about the severity of her impairment. The application was approved retroactive to 2004. After adjustments, the couple received over $7,000 in refunds.
  • A couple with young children have been challenged by the wife’s cancer diagnosis. Her condition requires ongoing travel for treatment at Princess Margaret Hospital. Her application was approved and her taxes were reduced by $1,700 in 2007. In addition, she applied for credits for travel and meals for the trips into Toronto for the treatment.
  • A gentleman experienced a rapid decline after being diagnosed with pancreatic cancer, passing away within four months of the diagnosis. We processed a DTC application after his death and were able to adjust the return for the year he died.  And a portion of the credit was transferred to his common law partner.

If you think you may qualify for the Disability Tax Credit, here are the steps you need to follow?

  1. Download the T2201 form from the CRA website.  There is also a fillable version of the form.
  2. Have your doctor complete the form. Most family doctors are familiar it. They may charge you a small fee for completing the form.
  3. Send the form into the CRA and wait.  And wait.  And wait.  Your application is reviewed to ensure that you meet the criteria.

Once you are approved, you will receive a letter indicating to which years any retroactive approval is available. The letter will also indicate how long you may claim the deduction without having to reapply.

For retroactive years, you can download an adjustment form or request that your tax preparer complete the form for you. Send the form in and wait. And wait. And wait!  These adjustments often take 6 – 8 weeks to process.

If you or your spouse will be claiming this credit, you should update your withholding information at your workplace by completing a new TD1 form. This will reduce the tax withheld on each pay, putting the money into your hands sooner rather than waiting for your tax return to be assessed.

Remember, once you are eligible for the DTC, you are automatically qualified for the Registered Disability Savings Account including all the grants and bonds.

FYI: I’ve had to go in and delete some of the comments to make room for new posts… you guys are the first to top out a comments section. I deleted a lot of “thank you”s and some stuff that was repeated often to leave the comments with the most info for new arrivals.

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Gail Vaz-Oxlade

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1,635 Responses to “The Disability Tax Credit”

  1. Right now in Winnipeg I’m told that it’s a 13 week wait…(in January I was told 8 weeks)

    I am approved from 2014 to 2019 then I will need to reapply.

    My Dr. And I found out information dating back to the early 2000 so now I am waiting for approval.

    Right now my status is we are processing your information for the disability tax credit…hopefully this is good.

  2. Well finally after 10 months from originally applying to the questionnaire that to from Sept to Feb to get returned my son finally got approved now It just waiting for calculations.

  3. Hi, where my son was just approved a few days ago and I normally file my taxes online do I now answer yes to the disability questions for my 2016 income taxes?

  4. avatar Rick Stearns Says:
    March 4, 2017 at 2:58 pm

    I am on government disability and was approved for the DTC. Because of my low income i cannot use the credit. Who am I allowed to transfer it to. I live alone no spouse or commen law. Can I transfer it to another family member? Thanks

  5. avatar Bronwyn Says:
    March 6, 2017 at 9:50 am

    @Shelly that’s amazing news!!!! and Yes I would assume you would answer yes for your 2016 taxes. I’m almost going on a year with no end in sight 🙁

  6. Hello everyone.
    Trying to make sense of this all.

    I don’t recall ever “applying” for any type of benefit. My doctor just said to mail the forms in and see if there is a credit I would be entitled to claim.

    My account was updated March 1st that I “am entitled to claim the disbailty tax credit for *** from 2014-2026”.

    Nothing else has changed on my account.

    I called CRA and she told me to just claim it next year on my taxes.

    So does everyone get a benefit backpay or what should I be expecting here?

    I am so confused and the girl on the phone mentioned nothing of a benefit that would be added

  7. @kayla we are mainly talking about child disability benefit, applicable only to children who are approved for the disability credit.

    If you are approved it only means you are entitled to non refundable tax credits which means it can only lower your tax payable. if you have paid taxes on 2014 and 2015 taxes you might get a credit for those, depending on how much you paid.

  8. So sorry. It is my son (who is 3) who is “entitled to claim the disability tax credit”

    Does that mean he is entitled to the benefit? I see no updates on my Child Tax Benefit payment amounts on my CRA.

    It changed from “processing” to “entitled” on March 1st 2017. Nothing else has been updated. Does being entitled to the credit automatically mean I’ll get some type of back pay for him? CRA rep did not mention anything of the sort

  9. So confusing and the rep on the phone maybe has me more lost than before because by reading all the comments here, it appears to me that “entitled” means “approved” and that equals backpay?
    But lots seem to be saying their acct was updated quite quickly after “entitled” was said. And mine has not changed.

    I’m trying not to get my hopes up but I have spent so much out of pocket for expenses that a backpay would help pay that back.

    Maybe being “entitled to claim from 2014-2026” just means I do my taxes differently now every year and you have all applied for something different? Ah. No idea.

  10. @kayla – Congratulations on finally getting approved for your son, the hard part is now over. However, now is where patience is evidently important as the CRA processing times are abnormal this time of year (tax season); After getting your approval letter, you must now submit documentation requesting the CRA to adjust not only your taxes but your Canada Child Disability Benefits as well. Depending on how much taxes you’ve paid since 2014 you may be entitled to a large sum of money, this is known as a credit. As far as the Canada Child Disability Benefit you must request in a letter with a letter head directed to your tax centre with a title (call CRA and ask as I forget the title). From there on, they will calculate and send you monies from the date of approval. My account was updated almost one month after approval for my son and that was only the partial payment for the CCDB. They are telling me to all in all wait 11 weeks from the time the letters for adjustment was recieved. This process is quite stressful as many of us parents have spent so much money from our own pockets a little spare change can help a long way. My opinion to you is to give them a call every Monday and ask for any updates on your account. If you have a CRA account online, keep an update on that as the CRA account and the tax centre have the same information on file. Hope that helps!

  11. @Martin thank you so much! I actually just called CRA again and spoke to a rep. She didn’t look into my acct but she did say everything is just automatically done for the benefit….?
    She said no paperwork would have to be sent.

    Which documents did you send? I do have an online CRA acct. Should I submit something through there? Not sure what to fill out.

  12. I have on My CRA acct “adjust taxes” and I can select years. But not sure which slips to add?

  13. @kayla

    Well clearly these representatives are not helpful, never is, never will. It is automatically done for the last two years. So if you were approved from 2014 and its 2017 now they may possibly go back to 2015 only. This procedure I am not sure if they will also include the 2014. Just to be sure, send them the additional documentation. As far as the taxes you also must send a letter to them it is the best option as many people here have selected to just mail them the forms or fax it over to their tax centre.
    In order to get the reassessment here is an template you can use for both CCDB and you Tax adjustments.

    [ FULL ADDRESS OF YOUR TAX CENTRE]

    [ Attention – Canada child benefit ]

    It has come to my attention that as of ( date of approval; date of the letter you received/will recieve)
    My child has been approved for the Disability tax credit. The years are from (ex. 2014-2019) I kindly ask you to reassess the Canada Child Disability Benefits for the years stated above.

    Thank you,

    NAME OF THE PERSON CLAIMING THIS ( You for instance as you are the parent)

    The same follows for the tax reassessment; same letter head, however

    Attention: T1 adjustment for Disability Tax Credit

    I am now are my child (name of child) qualifies for the disability tax credit from these years (ex. 2014-2019) I kindly ask you to reassess all my taxes for the prior years including federal and provincial, i received the notice of determination on (Date you received your approval letter)

    Do not forget to include your child’s name and sin card as well as YOUR sin card and make sure you clearly state which sin card belongs to who in both letters, sign it and date it and fax it over to your tax centre.

    Hope that helps,

    Best of luck !

  14. @Martin

    That helps tremendously! Thank you so very much. Things make a lot more sense now!

    Very appreciated thanks again!

    Maybe April I will see some type of update:)

  15. I just checked my CRA account and it now says, “You are eligible to claim the disability tax credit for yourself.” I just waneed some clarification, does eligible mean approved? Thanks.

  16. @browyn
    It took a total of 10 months for us with alot of delays I had given up before xmas. Keep at it !

  17. avatar Cassidy Says:
    March 9, 2017 at 2:59 pm

    Could anyone please tell me the estimated time to get approval for the DTC? I applied on behalf of my son in the middle of January 2017.

    I have a CRA account online. Would updates be available there and if so where can I find them? I’m new to all of this and completely have no clue what I’m doing. Thank you in advance.

  18. I now see my taxes since 2014 as “reassessment” and says March 16th that will be available to view.
    Will there be a backpay amount for me to view somewhere or just wait until April and see what happens?
    I also see April CTB adjusted to a new amount

  19. @Cassidy
    Mine was sent in December, approved end of February. Still waiting for any other payment updates but my online acct does show new info every few days since approval

  20. Perfect. Thank you Kayla!

  21. avatar Cathleen Says:
    March 13, 2017 at 6:44 pm

    I’ve read through this entire list of comments but I still have a question…..We are on round two of trying to apply for the DTC and today the following statement was on my account. “Based on the information we have received, we are unable to determine if you are eligible for the disability tax credit for yourself.”

    Now I know they already sent the letter to the psychologist asking for more information but it was a few weeks ago that she received it. Do you think this is just the my account catching up to the paperwork flow or that even after receiving additional information that they still want more information????

  22. I started this process back in December 2015. I am still waiting for any adjustments.
    My daughter was approved in April 2016. Is it taking anyone else this long to see
    any adjustments on their account?

  23. Hi, when I view my account I can see they automatically calculated back 30 months for the ccb I had originally sent in the request for reassessment with m application does anyone have any idea how long that process takes. Wold it be possible I will recieve the retro in 2 installments?

  24. Hello everyone.
    I’m reading responses and not finding an answer for myself.

    My child was approved for the DTC. My 3 years previous taxes have been reassessed now on my CRA account, and I can see the April CTB amount adjusted a little bit higher.

    Does anyone know if there is supposed to be a backpay? Where would that show up on my cra account if so?

  25. @Lisa under the ccb if you go to the statement area it shows all your previous payment if you scroll down it will show any months adjusted and at the bottom a credit if they have gotten to this point with your file. I’m assuming with tax season everything is delayed. I would guess you would have to view each assessment and re assessment to view any difference in the refund amounts so if one year your refund say 1000 and the re assessment says 1700 they owe u 700 for that year.

  26. @Shelly, thank you!
    I do see it there under Statement. Says there is a “credit as of March 20th” and then has the amount. Also has my normal CCB payment. April’s CCB is adjusted to include disability benefit. So since there is no deposit date listed for the back pay, I will assume April.

  27. @diane ; any updates?

    My CCDB has been updated since 2014. When will the remainder be calculated if they calculated it on FEB 12TH for the march assessment.

    Thanks,

    Martin

  28. Hi, I was approved early March for my daughter and am allowed to claim back to 2006. All of my income tax has been reassessed and there is a large credit. The reassessment dates shows march 20th, is this the date I can expect payment? Also my ccb was done back 3 years with another big credit and I sent request that they go back to 2006. So far they have gone back to 2008 (July to dec) I am told I will get this amount in April. Is there a reason they did not go back all of 2008 and back to 2006?
    Thanks

  29. I should also mention that when I go to statement of account it says info not available online at this time

  30. @Lisa mine s exactly the same they said it probably won’t be til april i recieve the credit and they still have 3 tax years to re assess. Wait and see I guess

  31. @Hillary if they have gone back to 2008 your assessments must still be in progress did u send the request for re assessment for all the years approved? I’ve ready payments will sometimes come in installments right in the middle of tax season I guess we have to be patient.

  32. @shelly it says that my returns from 2006-2015 have been reassessed and that I can view them on March 20th. What I am trying to determine is if I will also get the credit deposited on March 20th.
    Also my ccb payments have been amended to include dtc but they have only gone as far back as July 2008. I’m wondering why not back to2006

  33. @hilary if they were re assessed before February 27th the will probably issue payment after the 27th you will need to wait til next month.

  34. @Shelly. Received payment for reassessment of ten prior years today!! Yippee! Just waiting on back pay for ccb which I assume will come April 20th. Thanks!!

  35. Hello All,

    I applied about 2 months ago and I still do not see any updates on my CRA account online. Will it only show the status once approved (or not approved).

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