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.

1,739 Responses to “The Disability Tax Credit”

  1. @paula

    One step closer now, hopefully they except!!
    How many questions were there? Hopefully 2 will be enough to satisfy them. I honestly dont understand why some peole get excepted with ease for ADHD..ODD or stuff like that and then others must go throuh hoops just to be denied.

  2. @paula

    One step closer now, hopefully they except!!
    How many questions were there? Hopefully 2 will be enough to satisfy them. I honestly dont understand why some peole get excepted with ease for ADHD..ODD or stuff like that and then others must go throuh hoops just to be denied

  3. hmm. I would say the 6 that are circulating on this site. 1. can your patient perform daily living skills the same as another child of the same age. (they give examples ) like tying shoes, showering.. @. is can a patient express basic needs the same as a child of the same age . again with examples. “I need to go to the bathroom”, I’m tired”. 3. is can your patient make age appropriate choices in day to day situations compared to a child the same age. they ask for at least 2 examples. 4. is does your patient require one on one support to function. 5. is does your patient have severe memory loss and 6. can your patient adapt to changes in his or her environment. They also ask if patient is taking any medication pertaining to the disability and if medication or therapy will improve anything.

    One step closer yes and at least I know that if they deny it the letter I’ll be writing will be coming from me so it wont take as long for it to get into the mail.

    Have you had any changes yet Nancy?

  4. Hello,

    I am wondering if anyone is dealing with the Winnipeg Tax Centre?
    I had originally sent in my application on March 26 – on May 9th they told me that they never received the application and asked me to fax a copy in and re-send another copy in the mail.
    I am wondering if anyone has any info on how long the process usually takes to see an update on your CRA account and where specifically (on the account) that it tells you if you have been approved or not?
    Every time that I call CRA, I get a different time line – first it was 6 weeks, then 8, then 11 and now I was told 90 days… this is such a frustrating process! After a diagnosis is received from the doctor, the benefit should automatically be applied! Ugh

  5. @paula
    Still has not been processed going on 11 weeks now, I was told I would have an answer by 10 weeks now they say 12. Then I too will probably end up with that dreaded 2nd questionnaire (sigh)

    @Ella

    It’s definitely a long enoying wait, I applied for my son who is ADHD, ODD, Mood disorder ect and still have not heard anything after 11 weeks!!

  6. @Ella sorry some of my responce got cut off

    Apparently you wont see an update until a decition has been made, some people end up seeing “there has been a delay in processing your application` whitch usualy means they have sent another questionar out to your doctor.

  7. @ Nancy
    Thanks for the information. It is such a frustrating process… I already had to wait 8 weeks before I was told that they “lost” my application. So I had to resend it in, and now have to start the whole waiting process again. As soon as the application is received, it should trigger an update in the system to let you know that they at least received it and are working on it.

    You are dealing with the Winnipeg tax centre, right?

  8. avatar Bronwyn Says:
    May 26, 2017 at 4:43 pm

    @Paula

    I had all questions marked off as no minus the memory one and I was denied the credit for my son. I am currently appealing the decision. I originally applied back in March of 2016 and started my appeal in January with no end in sight. The whole process is very frustrating

  9. Just got told today that they have now pushed the processing time for my application to June 26th… so 15 weeks in total ?

    @ Ella im with the Jonquiere tax center.

  10. @ Nancy, with them pushing it lets hope they’re not going to request more information on top of that.

    @ Bronwyn, I’m sorry that they’re giving you such a hard time . Seriously, what more information do they need?

    Wonder if they get bonuses or some sort of reward based on piece work. We’re HUMAN :/

  11. avatar Bronwyn Says:
    May 29, 2017 at 10:24 am

    @Paula sometimes i wonder lol

  12. The processing times do not make sense at all! A week ago I was told that the processing time was 90 days. This morning I was told it is 7 weeks. (Winnipeg tax center). The lady I spoke to this morning said that the processing time changes everyday, and is dependent on how many applications they receive that day – this makes absolutely NO sense to me!

    They need a better system that will update your CRA account as soon as the application is received so that people dont have to be constantly calling in/ wondering the status of the application. From what I was told, the CRA account is only updated once the application is either approved or denied. Considering I waited 8 weeks before finding out they “lost” my original application, and then had to start the whole process (including the starting back at zero for the wait time), they need a better system that would prevent this from happening!

    For those of you that have dealt with/are dealing with the Winnipeg tax centre – how long once a decision has been made, does it typically take to do the reassessment?

  13. Logged on today and found out my son is approved!!!! It was a long wait but it worked out.

  14. @ Nancy! congratulations! Now that you’re approved the rest of the waiting is a piece of cake!

  15. @ Nancy
    That’s awesome news! I hope the rest of the process is a speedy one for you!

  16. Thanks everyone im hoping things process quickly from here? ill keep everyone updated!!

  17. ok ..I’ve been through this forum WAY too many times. all the way back to 2009 lol. CRA still hasn’t received the additional info from my dr but online changed to “not entitled”. I called AGAIN today and spoke to a guy to ask why and mentioned that if they did receive the questionnaire that this was a fast decision. I also asked if this was the normal process while they wait for additional information he said that it was. Has anybody had this happen to them while waiting for the information to get to CRA?

  18. Grr. Called again today and I spoke to somebody else. apparently they received the questionnaire yesterday and they denied it the same day saying that my daughter is only unable to function when she is under stress and that it isn’t over 90% of the time. I knew it. :/ I guess all that’s left is me writing a letter outlining her daily struggles and submitting that. But seriously even with the full psychiatric assessment ..a day to decide? How is that even possible? anyways, guess I’m off to write a letter that I have no idea if they’ll even look at that or not. I can see why people pay the 30% for outside companies to help them with this process. Beyond frustrated and disappointed

  19. @Paula

    Sorry to hear you were denied.

    You have to wonder how fair the system is when you send in that much info and still get denied.

    Also I remember reading on here that others too had been denied after the questionnaire and they were told the same as you “ due to stress“.

  20. Well I mailed a personal letter (4 1/2 pages) outlining the daily struggles as well as all the letters of school suspensions for various reasons along with her updated IEP and and recent report card. I sent it express with tracking. Hopefully by next Friday the decision will be reversed. I also called and requested another DTC application to be mailed out So that I can have things in place if I get denied again. Guess we’ll wait and see.

  21. Hey everyone

    Just wanted give you an update on my timeline, my taxes have been reassessed today for all years 2012 to 2016 and money will be deposited on the 15th. Nothing done on the ccb yet. So 1 week from getting excepted, was pretty fast!!

  22. @nancy
    So how long from the time they were “processing the application” until it changed to approve on the CRA website?
    I just noticed today that they have finally received my application and are processing it (I sent it in March)… Just wondering what to expect next?

  23. @Ella

    Nothing ever showed up on my account until i was approved, I never even got the processing application message that everyone else talks about.

  24. Hi everyone. I’m really happy people have kept logging in and posting their experience with applying for the DTC. Our psychologist was filling it out for our son and sending it off. She said it was sent off but didn’t tell me when. Should I check with her, or with CRA to see if they received anything? I have no timeline in how long to wait then. We have put my husband as the spouse to transfer to or whatever it is called.

    Also, same psychologist is filling out paperwork to send my application in. Multiple disorders and issues, haven’t worked in 8 yrs, etc. I have written down transferred to my spouse. Does anyone know if anything would show on my CRA acct online or if it would just be on my spouses?

  25. So my son was approved for the DTC on April 20, took approx. about 5 months to get approved. Now with the Winnepeg tax centre I was told 6 weeks for reassement to be completed on my taxes and the DCB, called today as I havnt heard a word since April 20/17, they told me it wont be completed until Aug 27/17. So almost a year we have been on this journey good lock everyone

  26. My son is 21 but was diagnosed with terets at the age of 10 am I still able to get disability tax credit

  27. Apparently CCB will not retro pay anything in the month of July so they say I wont see my retro payment until Aug 20th. Calculations are still not done for my CCB. They also told me the deadline for calculations is the 27th of each month. However I did get all my income tax retro today in my account so just 3 weeks after being approved.

  28. After “losing” my first application that was sent to them in March, then re-sending the application (two additional times), CRA is FINALLY processing the application for my son.

    But, what does that mean – they received the application and then sent out a questionnaire to the doctor. So frustrating! I kind of feel like they (CRA) do that in an effort to buy more time, because essentially that’s all it does, in addition to putting strain on the medical system (the doctor has already filled out the application, wrote how the disability affects the child, so why do they need to do it again?).

    Has anyone else had the questionnaire go out to the DR? What questions are on it? Does the doctor have to mail it in, or can he give it to me to courier over there? (all this couriering is costing me a small fortune!)

  29. avatar Michelle Says:
    June 15, 2017 at 6:05 pm

    I heard they automatically give u 2 years back pay…I clicked off the assessment thing on form do I still have to write a letter? And online doesn’t show me any amount just says from 2011-2021.will they put on there an amount

  30. @Ella Paula has listed the questions a few posts above, from what I have read it is the doctor who must send the form back.

    @ Michelle I ticked off the assessment box as well plus sent in a letter online through my online cra account and everything was reassessed at once. I believe they said they changed the form to include that box to simplify things.

  31. avatar Brittanie Says:
    June 21, 2017 at 11:45 am

    How long does it take to transfer the disability tax credit over to your spouse?! Its been almost 4 weeks now since we requested they transfer the credit over to my spouse’s account as he’s the one with a more taxable income, and we requested this after we got approved for disability for our son (5yrs), we received the back pay for child disability benefits yesterday, now just wondering how much longer I have to wait to receive the other money from the disability tax credit since they have to transfer the credit will it be a long wait?

  32. @Martin @Bronwyn – Well the waiting game begins once again. I have had my Dr write a 3 pg letter pretty much spotlighting his effects of impairment and that they are present 90% or more of the time. It is very detailed and if this get denied I will not be a happy camper by any means. It should of never been denied the first time. How does someone look at a 22 pg PE assessment that details everything very clearly and deny them??? Seriously I do not get it. @Brownyn as my letter stated when we got denied it said that if the Dr had anything else to add to show the effect of impairment as opposed to the “presence” then to have them write a letter and submit. I guess I will have to see…

  33. Hi!i submitted the DTC application march 6 and approved march 26.Received dcb April 20.How long is the wait for DTC refund?

  34. @chel

    I submitted mine March 10th and was aproved may 31st. All my taxes were reassessed and refunded by June 15th. I still havent received the DTC yet and still no calculations showing on my account for it. Maybe you should give them a call about your DTC.

  35. Sorry I meant I still havent received my DCB.

  36. @nancy
    I phoned the Winnipeg tax centre yesterday and the guy told me that my sons DTC application was closed..He said I have to request T1 adjustment,which I told him that I did ticked off the DTC application.He did reopened it and refund will be on September

  37. Anyone out there still waiting to a refund i was approves im dec 2015 its now Lmost july still waiting for them to finish reassessing my taxes since 2012 to 2015 i get there backedup but 7 months wait

  38. Just wondering if anyone has a timeline for approval this time of year, they received my application 8 weeks ago today but I heard nothing yet.

  39. Tommy ive been waiting over 7 months the cra is backed uo from last year ill probably still be waiting till august

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