Frequently Asked Questions
Q. How does the disability tax credit work in Canada?
If you are out of work because of a severe, long-term mental or physical disability, you may be eligible to receive up to $45,000 in a year. In order to apply to receive the tax credit, you must submit the Disability Tax Credit Form (T2201) to the Canadian Revenue Agency.
Q. Can I claim this tax credit for previous years?
Yes. We have helped many Canadians claim for previous years. Many Canadian aren’t aware of the Disability Tax Credit, which is why so many miss out on the opportunity to receive money from the government while suffering from a disability.
Q. Does the Disability Tax Credit expire?
Once you are approved for the Disability Tax Credit, you are automatically approved to receive it for future years. The Canadian Revenue Agency may look at your application to determine how long you are covered. If you are only approved for a few years (rather than unlimited years), you will need to reapply for the Disability Tax Credit.
Q. Where do I get the Disability Tax Credit Form (T2201) from?
You can obtain a copy of the T2201 form from the CRA’s website here.
Q. Can I qualify if my condition has improved?
A. If your disability was present continuously for a minimum of 12 months sometime in the last 10 years, then yes, you can still qualify for the Disability Tax Credit.
Q. Can you receive the Disability Tax Credit if you have never worked?
A. The Disability Tax Credit is meant to be a safety net for people who have paid federal taxes. However, if you have a family member who supports you and pays their taxes, then you can claim the Disability Tax Credit on that family members’ taxes.
Q. Do I qualify if my condition is not present all the time?
A. There are health conditions that produce persistent and continuous after-effects, even though the condition isn’t seemingly present. Qualifying for the Disability Tax Credit with a condition that is not always present depends on the severity of the after effects. It would help to consult a medical practitioner when applying for the Disability Tax Credit.
Q. Who qualifies for the Disability Tax Credit?
A. If you suffer from a severe impairment, you can qualify for the disability tax credit. The term ’severe impairment’ encompasses people who take an inordinate amount of time to perform essential activities or people who undergo life-sustaining therapy to allow the body to perform vital functions.
You can also qualify if you can prove that your physical or mental impairment is severe and prolonged.
What’s the T2201 form?
To apply for Disability Tax Credit, you need to fill out the T2201 form which can be downloaded here. The form is basically an assessment questionnaire that is meant to determine your eligibility. It consists of two parts:
Part A is where you fill in your personal information such as your name, address, sin number etc.
Part B is filled out by a medical practitioner. Here, the practitioner certifies impairment in one or more categories (your vision, hearing, speaking, walking, feeding, and dressing abilities and mental and bowel or bladder functions). Each part has to be completed by the right practitioner. For example, an audiologist or an MD should fill out the hearing section while an optometrist or an MD will fill out the vision section.
How much can a person get in disability tax credit?
A disabled person that qualifies for all benefits and credits can receive a total of $1500 – $2000 per year. A family with a disabled child can receive around $3,000-$4,000 per year in all refunds and credits.
Who qualifies for Disability Tax Credit?
In order to qualify for disability tax credit, the applicant is considered as “markedly restricted” in performing either of the following basic functions of daily life:
- Elimination of bowel and/or bladder
- Mental functions necessary for daily life.
If the restriction interferes with the individual’s ability to perform any of the above-mentioned tasks, that means that they qualify for disability tax credit.
Which disabilities qualify for DTC?
Each case is different, and while there is no exact list of disabilities that qualify for disability tax credit, there are certain conditions that affect a person’s ability to perform daily functions. These are:
Arthritis, ADHD, ALS, Alzheimer’s disease, Anorexia or Bulimia, Asperger Syndrome, Autism, Bipolar Disorder, Blindness, Glaucoma, Cerebral Palsy, Chronic pain, Deafness, Dementia, Depression, Diabetes, Down Syndrome, Dysgraphia, Epilepsy, Fibromyalgia, Mental Retardation, Parkinson’s disease, Multiple Sclerosis, Speech Disability, and others.
Can I get Disability Tax Credit if I’ve never worked?
Disability Tax Credit aims to help tax-paying, disabled Canadians, which means that you have to pay federal taxes in order to receive it. If you’ve never worked, that means you’ve never paid taxes and you can’t claim DTC. However, if you have a family member who supports you, and that person is a tax-paying Canadian, then you can claim the DTC on their taxes.
Q. Do I file taxes if I receive the Disability Tax Credit?
A. YES. You will need to file taxes even if you get the Disability Tax Credit.
Q. How long does it take for my application to be processed by the CRA?
A. Once the CRA receives your application, you can expect to wait 4 – 10 weeks to learn the outcome of your application.
Q. How is the Disability Tax Credit paid?
A. The Disability Tax Credit is a tax deduction, which means the tax credit comes in the form of a reduced tax bill. If you become eligible to receive the tax credit, then the Revenue Service of Canada will calculate how much you are eligible to receive and subtract that amount from the money you would have paid in income taxes. You receive the money for the credit in your tax return.
What if my application gets denied?
Applications that get denied are mostly those that weren’t filled out properly. If you filled out the application yourself, your first step is to review the entire document and check for information that might have been omitted. The best thing to do is to have a qualified specialist review and check for missing info. If you’ve reviewed all of the necessary information and the application has again been denied, you have the right to appeal. At this point, an appeals officer will be assigned to your case and they will review all aspects of your application.
How long does it take to get approved for DTC?
There are 2 main processes in your disability tax credit application.
- Assessment of eligibility – Once you submit your application, you should hear back from the CRA in about 4-10 weeks. If the CRA requires additional information from your doctor, the process might last longer.
- Refund assessment – This is where the CRA calculates the amount of refund you will receive. The disability tax credit will be directly deposited into your account if you have signed up for a direct deposit with the CRA, if not, they will send you a cheque.