How do I know if I qualify to receive the Disability Tax Credit (DTC)?

One of the most common questions when it comes to Canada’s Disability Credit is whether or not you qualify. The good news is that there are a number of medical conditions that will make you eligible but every applicant also needs to fulfill specific criteria. Even if you are applying as a caregiver (partner, spouse, sibling, etc.), you too will need to meet the requirements.

How to find out if you are eligible for DTC

First, you will need to understand your particular medical condition or situation and just how much it will affect your daily life. Will you require moderate to round the clock assistance? Who will be caring for you and do they meet the necessary requirements in order to qualify for DTC? Your eligibility is determined by the Canada Revenue Agency (CRA), and in order to establish eligibility, you need to submit your application with form T2201 to the CRA. Applications cannot be sent by email or fax.

How to complete your T2201 Form

Once you have downloaded the form, you will notice that it is made up of two sections. Section A applies to the person suffering from the disability, while Section B must be completed by the relevant medical practitioner. Upon reviewing your application, the CRA may request further details pertaining to your medical condition and the extent of your disability.

Part A of Form T2201

You will notice the phrase “Markedly Restricted” used several times in this form. This term refers to the person suffering from a disability that affects at least one of the following:

  • Dressing
  • Walking
  • Feeding
  • Speaking
  • Bladder or bowel elimination
  • Mental functions required for daily life

The level of restriction should be acute in at least one of these areas or significant in two or more of these areas for over 12 months. This restriction must interfere with the person’s ability to perform daily tasks and vital functions in order for the person to qualify.

To gain an accurate understanding of your personal situation and difficulties, it’s important to be prepared to answer the following questions:

  • Have you or do you expect to experience impairment for a minimum of 12 months? If yes, continue through the rest of these questions.
  • Are you blind?
  • Are you receiving life-sustaining treatment/therapy? For example, kidney dialysis or the use of a device that facilitates breathing.
  • Are any of your daily activities significantly restricted by your impairment? These include walking, speaking, dressing, hearing, elimination (bladder/bowel), feeding, and mental functions. According to the CRA, markedly restricted refers to all or at last 90% of the time OR if it takes a substantially long time to perform specific activities.

In addition, you need to answer ‘YES’ to all of the following:

  • Do you experience significant restriction in two or more of the above-mentioned daily activities even with the necessary therapy, medication, and/or devices?
  • Do you experience these restrictions together for at least 90% of the time?
  • Does the cumulative effect of the restrictions you experience equate to being “Markedly Restricted” in one activity of daily life?

If your answer to the first question and one or more of the rest of the questions is yes, then you could qualify for DTC. Bearing in mind, however, that if you already benefit from some form of compensation such as workers’ compensation or another disability insurance, you might not qualify for a tax credit.

Section B of Form T2201

This part will need to be completed in full by your medical practitioner. Your doctor will need to complete this section correctly and provide any and all supporting information. The CRA might contact your doctor to gather further details.

After submission

Once you have submitted your application, it can take 4 – 10 weeks for approval. Hereafter, the CRA will need to calculate the amount for which you are eligible. You may also be able to apply for retroactive benefits (up to 10 years). For retroactive benefits, you will need to complete an additional Form T1-ADJ for every year. Remember, even if you meet all the medical requirements, you also need to have paid your federal taxes for the period which you wish to claim.

Applying for your Disability Tax Credit on your own might sound like a good idea. However, if your application is not properly completed, you could easily be denied. Even if your application is approved, you might not receive all the benefits you should. This is why it’s best to have an expert team in your corner.

Call today Tax Benefits Canada today for your free assessment and professional advice.