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Filing Your Return  ->  Disabilities -> Disability Amount Tax Credit

Line 31600 Disability Amount Tax Credit

Note: Before tax year 2019, line 31600 was line 316.

Income Tax Act s. 118.3

New June 5, 2020: Canadians who are certificate holders of the Disability Tax Credit (DTC) as of June 1, 2020 will receive a one-time tax-free payment of up to $600.  The payment will be 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.  The payment date for these payments was not announced.

Update July 17, 2020:  Eligibility for the above one-time payment has been expanded to include Canadians with disabilities who are recipients of any of the following programs or benefits:

 - a disability tax credit certificate provided by CRA;

 - Canada Pension Plan disability benefit or Quebec Pension Plan disability benefit; and

 - disability supports provided by Veterans Affairs Canada

Canadians with disabilities who are eligible for the disability tax credit but have not yet applied, will have a 60-day window of opportunity to do so after Royal Assent, which was received July 27, 2020.  This gives people until September 25, 2020 to apply for the disability tax credit.  There may be many people who have 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.

To qualify for this non-refundable tax credit, a form T2201 Disability Tax Credit Certificate must be completed, certified and submitted.  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.  See our article on changing your tax return for how to do this, and the time periods for which it can be done.

The T2201 can be submitted to Canada Revenue Agency (CRA) separately from a tax return, and CRA recommends filing these in advance to avoid assessment delays.

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 audiologists, occupational therapists, optometrists, physiotherapists, psychologists and speech-language pathologists.

The amount of this federal tax credit is $8,576 for 2020 ($8,416 for 2019), with a supplement of $5,003 for 2020 ($4,909 for 2019) 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 $2,930 for 2020 ($2,875 for 2019), and eliminated completely when those expenses exceed $7,933 for 2020 ($7,784 for 2019).  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.

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

bullet speaking
bullet hearing
bullet walking
bullet elimination (bowel or bladder functions)
bullet feeding
bullet dressing, or
bullet performing the 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):

"an individual's ability to perform a basic activity of daily living is markedly restricted only where all or substantially all of the time, even with therapy and the use of appropriate devices and medication, the individual is blind or is unable (or requires an inordinate amount of time) to perform a basic activity of daily living"

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.

Life-Sustaining Therapy

Individuals receiving extensive therapy are eligible for the disability tax credit (DTC) if their therapy meets 3 conditions:

  1. it is essential to sustain a vital function of the individual,
  2. it is required to be administered at least 3 times each week for a total duration averaging not less than 14 hours a week, and
  3. it cannot reasonably be expected to be of significant benefit to persons who are not so impaired.

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:

- Where the therapy has been determined to require a regular dosage of medication that needs to be adjusted on a daily basis, the activities directly involved in determining the appropriate dosage will be considered part of the therapy.

- Therapy does not include activities such as following a dietary restriction or regime, exercise, travel time, medical appointments, shopping for medication or recuperation after therapy.

- The time it takes to administer the therapy must be time dedicated to the therapy—that is, the individual has to take time away from normal, everyday activities in order to receive the therapy. Further, in the case of a child who is unable to perform the activities related to the therapy as a result of his or her age, the time spent by the child’s primary caregivers (i.e. parents) performing and supervising these activities for the child can be considered time dedicated to the therapy.

With these changes, many children with Type I diabetes may be eligible for the DTC.

Disability Tax Credit Promoters Restrictions Act

Don't be misled by some companies which seem to indicate almost anyone is eligible for the disability tax credit.  If you actually are disabled, then you shouldn't have to pay someone a percentage of your tax credit in order to claim it, when all you need is a form completed by your doctor.  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.  However, as of July 27, 2020 the Act is not yet in force (not yet applicable).  The Coming Into Force section of the Act says "This Act comes in to force on a day to be fixed by order of the Governor in Council".  CRA held public consultations in November and December 2014 to obtain input from stakeholders about the maximum fee and who should be exempt from the reporting requirements.  The 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.  Interest parties can comment on the draft regulations before they are finalized.  The contact information for submissions is in the body of the Gazette information. Submissions must be made within 30 days of publication of the proposed Regulations in the Gazette.

See the CBC news article Tax Season 2015: The disability tax credit and the push for fee limits for more information.

TaxTips.ca Resources

Persons with disabilities - links to all information on TaxTips.ca

Canada Revenue Agency (CRA) Resources

Income 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

RC4064 - Medical and Disability-related Information

Form T2201 Disability tax credit certificate

Line 31600 Disability amount for self

Revised: July 28, 2020

 

 

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