Home -> Filing Your Return -> Disabilities -> Disability Amount Tax Credit
Note: Before tax year 2019, line 31600 was line 316.
Income Tax Act s. 118.3
If a qualified person (usually a medical doctor, but see above) certifies that you have a severe and prolonged mental or physical impairment which markedly restricts the ability to perform a basic activity of daily living, then a disability amount may be claimed. For 2005 and later years, eligibility for the disability amount tax credit includes persons with a severe and prolonged mental or physical impairment which significantly restricts the ability to perform more than one basic activity of daily living, including
Budget 2021 expanded the definition of mental functions necessary for everyday life.
If the cumulative effect of the restrictions in performing activities is equivalent to having a single marked restriction in one activity, then the person will be eligible for the disability tax credit.
The term "markedly restricted" as defined by the Income Tax Act s. 118.4(1)(b):
In many cases, a person may qualify for the disability tax credit even if they appear to be completely "normal". For an excellent article on this, see "Normal" People Are Eligible For The Disability Tax Credit Too, by Sharon Perry, CPA.
Effective January 1, 2021, people with Type 1 diabetes are now deemed to meet the requirements for life-sustaining therapy.
Individuals receiving extensive therapy are eligible for the disability tax credit (DTC) if their therapy meets 3 conditions:
See the Budget 2021 proposals re changes in relation to life-sustaining therapy to better recognize certain aspects of therapy for the purposes of calculating time spent on therapy.
The following changes were made for 2005 and later years, to better define activities that are considered therapy, and will be considered as time spent receiving therapy:
For more information on the expanded criteria see the September 2022 Life in the Tax Lane from Video Tax News, as well as the pdf of the CRA announcement about the major changes to eligibility.
Major changes include: people with Type 1 diabetes are now automatically deemed to meet the requirements for life-sustaining therapy, effective January 1, 2021.
A medical doctor and, effective March 22, 2017 as per the 2017 Federal Budget, a nurse practitioner can certify eligibility for the disability tax credit for all types of impairments. Other medical practitioners that can certify certain impairments in their respective fields are:
To qualify for this non-refundable tax credit, a form T2201 Disability Tax Credit Certificate must be completed, certified and submitted. The form has been redone and there is now a digital application process so that the application and submission can be done online.
Since June 2023, the applicant can now complete Part A of the application form online via My Account. This process allows the applicant to choose for CRA to adjust previous tax returns for all applicable years to include the disability amount. However, if the credit is to be transferred to a supporting person in some of the years to be adjusted, it may be necessary to do the prior year adjustments by doing T1Adj forms for each year. Once Part A is completed, the applicant will receive a reference number to give to their medical practitioner who will then complete Part B of the form.
We've taken some screenshots of Parts A and B of the online application so you can check it out, but it only has the first 2 pages of Part B. The responses to certain questions in Part B determine which parts of the application will have to be completed by the medical practitioner.
See Disability Tax Credit - digital application for medical practitioners on the Canada Revenue Agency (CRA) website for Part B of the form. It's recommended that all practitioners use the online form. Once the online application is completed, it is automatically submitted to CRA.
Manually Completing the T2201 Disability Tax Credit Application
If the T2201 is done manually instead of online, it can be submitted to CRA separately from a tax return, and CRA recommends filing these in advance to avoid assessment delays.
This form has sections on various types of physical or mental impairments. Each section asks for the year in which the impairment began. However, in order to have the disability tax credit applied retroactively, a form T1Adj must be filed for each previous tax year in which the person qualifies, unless the application is done using the online process. See our article on changing your tax return for how to do this, and the time periods for which it can be done.
Benefits2 allows patients and medical practitioners to fill out the disability tax credit application form online. A patient can complete the application and give it to their physician, or it can be completed by the physician. No physician? Benefits2 can provide a list of doctors in your area that you can contact to find out if they are willing to review your medical records and sign your application provided you qualify.
Benefits2 is NOT a Disability Tax Credit Promoter Company, and they charge a very low fee. Professional advisors Christine Brundsen, TEP, CEA, EPC, MFA-PTM, Dr. Wayne MacLeod, and Peter Curtis advocate for Canadians who qualify for the Disability Tax Credit and their Medical Practitioners.
The amount of the federal tax credit is $8,870 for 2022 ($9,428 for 2023), with a supplement of $5,174 for 2022 ($5,500 for 2023) for taxpayers under 18 years of age. The supplement is reduced when total child care and attendant care expenses claimed for the taxpayer under 18 exceed a threshold of $3,030 for 2022 ($3,221 for 2021), and eliminated completely when those expenses exceed $8,204 for 2022 ($8,721 for 2023).
See the tables of non-refundable tax credits for the provincial amounts and tax rates of this tax credit.
The disability amount tax credit is claimed by completing the federal worksheet included in the personal income tax return, and entering the resulting amount on line 31600 of the tax return (line 316 of Schedule 1 prior to 2019).
If part or all of the disability amount tax credit cannot be used by the taxpayer, it can be transferred to a spouse, common-law partner, or other supporting taxpayer (e.g. parent, child). See the Canada Revenue Agency (CRA) topic Line 31800 (line 318 prior to 2019) - Disability amount transferred from a dependent. A supporting taxpayer may also be able to claim the Canada caregiver amount (caregiver amount tax credit prior to 2017).
The transfer of the disability tax credit to a spouse or common-law partner is done on Schedule 2 of the federal tax return. The transfer to another supporting taxpayer is done on the federal worksheet.
Since the tax credit is not refundable, it may seem to be of no benefit to low income individuals who are already paying no tax. However, those eligible for the disability tax credit are eligible to open a Registered Disability Savings Plan (RDSP). Opening an RDSP allows the beneficiary to receive Canada Disability Savings Bonds (CDSBs) of up to $1,000 per year, for low and modest-income families.
If you are under 18, an additional amount may be claimed. This may be reduced by any child care or attendant care expenses that were claimed by you or a supporting person.
See the tables of non-refundable tax credits for tax credit amounts and income limitations, federally, and for each province and territory.
If you have incurred expenses in order to earn income, attend an educational institution, or do research for which a grant was received, you may be able to claim a disability supports deduction.
An RDSP is a way for a parent, grandparent, guardian or person with disabilities to provide future financial security for the disabled person. Opening an RDSP allows the beneficiary to receive Canada Disability Savings Bonds (CDSBs) of up to $1,000 per year, for low and modest-income families.
See our article on Registered Disability Savings Plans.
Canadians who are certificate holders of the Disability Tax Credit (DTC) as of June 1, 2020 received a one-time tax-free payment of up to $600. The payment was reduced by the one-time tax-free payments for seniors eligible for OAS and GIS. See Canada's COVID-19 Economic Response Plan, and scroll down to People with disabilities. In July 2020, eligibility for the above one-time payment was expanded to include Canadians with disabilities who are recipients of any of the following programs or benefits:
Canadians with disabilities who were eligible for the disability tax credit but had not yet applied, were given until September 25, 2020 to apply for the disability tax credit. There may have been many people who had not yet applied for this credit, because their income is low enough that the non-refundable credit would not provide them any benefit.
See all COVID-19 Financial Relief information.
Don't be misled by some companies which seem to indicate almost anyone is eligible for the disability tax credit. If you do decide to use a paid service to help you get the credit, make sure you ask them what happens if you are subsequently audited and have to repay the refund you received. Make sure you get the answer in writing.
On May 29, 2014, Bill C-462 was passed and the Disability Tax Credit Promoters Restrictions Act was created. This Act restricts the fees charged by promoters of the disability tax credit. Promoters that accept or charge a fee exceeding the maximum fee will be charged penalties. The Act and Regulations were scheduled to come into force on November 15, 2021, but this did not happen.
An injunction was granted by the BC Supreme Court on November 4, 2021, in True North Disability Services Ltd. v. Canada (National Revenue), 2021 BCSC 2142, stopping implementation of the fee cap until a determination can be made as to its constitutionality.
Proposed Disability Tax Credit Promoters Restrictions Regulations were published in Part 1 of the Canada Gazette on June 1, 2019, setting a maximum fee of $100 for submitting an application for the disability tax credit.
The $100 fee will be adjusted for inflation every 5 years, with the first "inflationary adjusted year" to be 2025. As noted above, an injunction was granted preventing the implementation of this fee cap.
What is a "promoter"? The Act defines a promoter as "a person who, directly or indirectly, accepts or charges a fee in respect of a disability tax credit request".
As noted in the Gazette, "This definition includes tax preparers, tax consultants, financial services providers, accountants and lawyers, or any other person who charges a fee to assist a taxpayer to submit form T2201, DTC Certificate (DTC Certificate), or claim or transfer the disability-related tax deductions on their T1, Individual Income Tax and Benefits Return. Medical practitioners whose only role is to certify the extent of a patient's medical condition for the purposes of a DTC request are not considered “promoters” under the Act."
However, the wording of the Act does not exclude medical practitioners from the definition of "promoter".
From John F. Oakey, CPA, CA, TEP, CC of Baker Tilly Canada: Open letter to CRA regarding Disability Tax Credit Promoters Restrictions Act
CBC news article: Tax Season 2015: The disability tax credit and the push for fee limits for more information.
Persons with disabilities - links to all information on TaxTips.caIncome Tax Folio S1-F1-C1 Medical Expense Tax Credit
Income Tax Folio S1-F1-C2 Disability Tax Credit
Income Tax Folio S1-F1-C3 Disability Supports Deduction
Form T2201 Disability tax credit certificate
Revised: October 26, 2023
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