One of the most important factors that influence your Disability Tax Credit approval is the impact of the disability on your basic activities of daily living (or BADL). The Canada Revenue Agency (CRA) has a strict checklist of medical conditions that qualify for tax credits and benefits. That said, it’s not only the disability that determines your eligibility for the Disability Tax Credit but also its impact on your daily life.
What are Basic Activities of Daily Living (BADL)?
The Canada Revenue Agency outlines three conditions that must be met in order to determine that BADL is significantly affected by the disability. These three conditions are as follows:
- severe impairment in mental and/or physical functions all or a substantial part of the time
- an impairment that has lasted or is expected to last continuously for a minimum of one year
- the impairment, its severity and duration must be certified by a qualified medical practitioner, and that medical practitioner must convey this on your Disability Tax Credit Certificate or T2201 form.
The impairment or impairments must restrict the ability to perform basic activities required on a daily basis. This consists mainly of self-care tasks. Examples of these self care tasks include:
- Eliminating (bladder or bowel functions)
- Mental functions needed for daily life
When one or more of these functions are limited by a disability, it can make even the most simple tasks difficult or even impossible. As previously mentioned, the disability and its effect on your daily life need to last or be expected to last for at least one year in order for you to qualify for a tax credit. Retroactive claims can also be made if your condition has significantly affected your life prior to submitting your tax credit application.
Significant and Marked Restrictions
The CRA divides severe impairment into two categories – marked and significant restriction. A marked restriction is more severe than a significant restriction but both can qualify for tax credits. Marked restrictions are when you are unable to perform BADL or when you take at least three times as long as the average person to perform these tasks. This includes other forms of assistance including devices and medication. The impairment must be present at least 90% of the time. If the disability is expected to continue for 12 months, it is also considered to be a marked restriction.
A significant impairment is when you are not able to perform two or more BADL. These two can be combined to be considered as the equivalent of one marked restriction. In other words, two somewhat minor restrictions count as a single marked restriction.
By understanding this aspect of the Disability Tax Credit application process, you will be that much more likely to be approved. During the application process, your disability needs to be described in such a way that it shows how it affects your daily life. If you suffer from more than one disability, this should also be clearly stated and the effects of each disability on daily activities should be listed clearly and separately to prevent any inconsistencies or confusion.
Given the nature of the application process and the documents required, it’s advisable to have an expert in your corner. At Tax Benefits Canada, our team understands the process. This allows us to assist each of our clients by providing expert assistance along with professional advice. Even if you are not sure about your eligibility, we can help you determine this too! For your free assessment, contact our helpful team at +1 (855) 413-6971. A disability tax credit could provide the financial relief you need to pay your bills, take care of medical expenses, and make necessary adjustments in your life or make investments in important things like ramps in your home or home medical equipment.