Lupus Canada Advokit

Disability Tax Credit

The information in this section applies to federal tax rules. While the rules of the provinces may mirror those of Canada Revenue Agency (CRA), individuals should verify the requirements of their particular province or territory with a reliable tax accountant.

Under the federal Income Tax Act, people with certain disabilities may be eligible to claim a Disability Tax Credit (DTC). Individuals claiming the DTC must fill out a T2201 form, and have their doctor complete a form as well.

Individuals claiming the DTC will need documentation from their treating physician describing the severity and effect of their disability. Any other material confirming the condition and its effects can be helpful (for example, documentation from a Worker's Compensation Board or an insurance company).

The DTC is a non-refundable tax credit for individuals who have "a severe and prolonged mental or physical impairment, which markedly restricts their ability to perform at least one basic activity of daily living." As a tax credit, it reduces the amount of federal tax that may be paid. If you owe less tax than your DTC, or no tax at all, you may be eligible to transfer the credit to your spouse or supporting person.

Eligibility

The local taxation-processing centre decides on eligibility. If the centre needs further information to decide on a particular case, the case is referred to a panel of medical doctors knowledgeable in the specific area.

The fact that you receive CPP or other disability benefits (such as long-term disability benefits or worker's compensation) does not automatically qualify you to claim the DTC. Once more, the definition of disability is different again. CRA reserves the right to make its own decisions about eligibility. It may take into account the fact that you receive other benefits but that fact alone doesn't guarantee that you'll be eligible.

You are responsible for any costs involved in getting additional evidence about your condition to support your claim, even if CRA requests that evidence. Provincial health insurance will not cover such costs.

If you received the DTC in the previous taxation year and still meet the eligibility requirements, you are entitled to claim it again without sending a new Form T2201. If, however, the period stated on the original form ended in the previous year, or if CRA requests it, you must send in a new form.