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.

1,932 Responses to “The Disability Tax Credit”

  1. @Amy,
    We are at the same stage. The Dr sent the forms in around Oct 1st so they should have been received by the CRA early last week. I called Friday and they couldn’t confirm that they had been received but said the wait won’t be as long..

  2. @Leah – I had to submit a letter ( from the Dr) outlining his effects of impairments as opposed to the presence of the impairment. ( Because a 25 pg PE assessment wasn’t enough ) Original documents were sent in Nov of last year, we were declined in Feb. The Dr took the letter from CRA and we resubmitted additional information and it has since been re assigned to an officer as of the 25th of August, Its a super long drawn out process. It sucks and and I am not a happy camper.

  3. @katiedee omy thats crazy! 25 pages should have been enough

  4. Has amyone applied for high functioning autism and got approved 1st time

  5. @leah I’m with the Winnipeg tax centre, and my original post doesn’t make much sense :p

    they received the additional information last week, not next week lol

  6. @shannon they did confirm to me that they have the new forms… it seems that it really depends on who you speak to, and if they are willing to look into it for you :s

    I am so anxious to know, my maternity leave is over, and we can’t afford my daughters therapy unless I work, however I really need to be home and available for her… do I return to my job, or stay home with my children?! It’s crazy how long this has taken!

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  8. Is there anyone else out there that can say how long it took them once the CRA received additional forms (the questionnaire) from the doctor? I too deal with the Winnipeg tax centre. And has anyone had problems getting approved if their child has autism? My son has ADHD, high anxiety, and is higher functioning with autism. Thanks!!

  9. @shannon i am in the same boat as u my son has high functioning autism adhs and sever anxiety but the dr only put on the form asd let me know how yours goes

  10. Once they received my doctors letter, I was approved within two weeks. I deal with the sudbury office. My son got approved for adhd only. It all depends on the wording your doctor puts on the form and questioner. If you don’t get approved, i would appeal it. From what I gather, the appeal process is faster. Im still waiting on DTC. I go approved Aug3.

  11. @shannon, I called today, and was told they received the additional forms on October 5th, so I will keep you posted on the time line. She also told me that the processing time for the tax reassessment in the Winnipeg tax centre is currently taking about 23 weeks.

    I’m thankful that this tax credit exists, and thankful to live in Canada, but I just want to know if it’s a yes or a no!

  12. @laura every1 talks about wording but nobody says what it is. Can u give me an example of what kind of wording they r looking 4?

  13. One of the words I believe is “severe” in either sight, talking, walking ECT..

  14. 8 weeks today.

  15. @doodle has there been any updates? Is it showing on your cra account yet?

  16. @melissa

    My doctor put something along the lines that even though my son takes medication, the medical condition is life long and his judgement is impaired. He also mentioned that he is restricted in all areas of daily/academics/social areas. He mentioned that he requires constant monitoring. All of these are true statements about his condition.

  17. @shannon, we were approved today! So just so you have an idea, they received additional info from doctor on October 5, and approved today on the 13th… you will have your decision soon!!

  18. @Leah, ugh, week 8 and nothing.

  19. @Leah, you?

  20. @Amy
    You deal with the Winnipeg office?
    Do you mind if I ask what disability your child has?

    Thanks!!

  21. @doodle Nope nothing im 9 days behind u. Maybe if u call there will be an update. The more i read on here the more i realize it doesnt update on ur account until its almost done.

  22. It is the Winnipeg office. My daughter has several anxiety disorders, but the one we went on is Selective Mutism. It is a severe anxiety disorder, actually a lot of children with selective mutism first get diagnosed with autism, and I believe from what you wrote above we are in very similar situations. Best of luck for a positive response EARLY next week!

  23. stop saying high functioning autism. Functioning labels don’t help and are part of the issue. CRA doesn’t want to approve “high functioning” because then they are functional well enough in life . A disorder doesn’t mean you are disabled. It needs to be worst case scenario…

  24. @doodle its ur 9 week mark was hoping 2 see a positive update from u

  25. @Leah, yeah the date popped up on my phone this morning (I entered all the weeks on my calendar) and nothing. Nada. Zip. Zilch.

    Someone upthread said, apply, and then fuggetaboutit….but that’s hard for me!!

    Ugh.

    They said that I would hear by December 1, 2017. 15 week mark.

  26. @ur 9 weeks in but 6 weeks away 4 a decision its sounds better that way

  27. @Leah, good point!!!!

  28. We are still waiting for the additional questionnaire that was sent in over 3 weeks ago to be reviewed (or even marked as received). I called in and was told because they gave our doctor until Oct 24th to return the form that they probably won’t even mark it as received until after then. Very frustrating because things get lost in he mail and we have no way of knowing they actually have it Original application was received by CRA on June 30th so this has been a very long drawn out process for us. Almost 4 months now… It’s nerve racking waiting to know whether or not we will be approved.

  29. Just talked to CRA and they have jumped the estimate another 7 weeks, so looking at mid-December now.

    As a note, when you call CRA the message at the beginning actually has been changed to say that T1 adjustments are experiencing delays

  30. @ks, when did they originally get your paperwork?

  31. Just called too. Heard the T1 delay message. At this point, that doesn’t affect me.

    He said December 1st still for me (original application).

  32. @doodle we were approved end of June

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