Persons with disabilities

Before you start

The federal government recognizes that Canadians with severe disabilities face a higher cost of living. The disability tax credit (DTC) is a non-refundable tax credit that helps people with disabilities or their supporting persons reduce the amount of income tax they may have to pay. Once an individual is eligible for the DTC , they may claim the disability amount on their income tax and benefit return. This amount includes a supplement for persons who are under 18 years of age at the end of the year.

Individuals can claim the following disability tax credits on their federal income tax and benefits return:

In order to claim the disability amount, the individual must have an approved form T2201, Disability Tax Credit Certificate on file with the CRA. The form must be completed by a medical practitioner, confirming that the individual had a severe and prolonged impairment in physical or mental function during the taxation year. Prolonged refers to a continuous period of at least 12 months.

Individuals who receive CPP disability or other disability income amounts are not automatically approved for the DTC, since the criteria used to determine the eligibility for each of these benefits is different.

The CRA verifies all new applications for the DTC before assessing the income tax return. In some instances the CRA may need to contact the individual or the medical practitioner to obtain more information, causing substantial delays in processing a return. If an individual is claiming the DTC for the first time, and they do not already have an approved T2201 on file with CRA, it is in the individual’s best interest to submit the return without claiming the DTC. Once the tax return has been assessed, the individual can then submit the form T2201 and wait for the CRA to confirm eligibility.

Once a decision has been made, the individual will receive a letter from the CRA informing them if their application has been approved or denied and, if approved, which years they are eligible to claim the DTC. The DTC can be retroactively approved for up to 10 years prior to the current year. Prior year returns can be reassassed to include the DTC and the invidual can make this request by filing form T1-ADJ T1 Adjustment Request.

As a volunteer, you can explain to individuals that Part A of the form is very simple to complete. It is preferable they have it filled in before meeting with their qualified medical practitioner, while Part B is to be completed by their qualified medical practitioner.

Note

It is not a volunteer’s responsibility to complete the form T2201. For assistance, individuals can contact the individual income tax enquiries line at 1-800-959-8281.

For additional information relating to this topic, check the following resources:

If you require additional guidance, call the CVITP dedicated help line: 1-866-398-3488.

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