Many families told me they are unsure how to apply for the Disability Tax Credit. If you are also looking to do so, this is the perfect post for you!
Just a quick recap, Disability Tax Credit is a non-refundable tax credit that reduces the income tax of the disabled person. It also opens up the door for several disability-related benefits. If you want to know more about its benefits, you can refer to my other post: Disability Tax Credit (Easy-to-Understand Guide)
This time, I want to emphasize applying for it.
To apply for the disability tax credit, the disabled Canadian must meet the condition of “marked restriction” or “significant limitations” or receive therapy to support a vital function. The disabled applicant and their medical practitioner need to submit the Disability Tax Credit Certificate, form T2201, to the CRA.
Not sure what the above means? Don’t worry!
In this article, I’ll walk you through each of the steps to apply for the DTC. Also, I’ve worked with many families who have successfully got it approved. I’ll share some of the things they did and tips that may help you in the application process.
Get the Disability Tax Credit Certificate
The first step is to get the T2201 form. This is the application that the CRA uses to determine whether you can qualify for the DTC. Here’s the link to download the form.
Part A is to be filled out by you, while Part B is for the medical practitioner.
Also, the T2201 form has changed over the years. They revised it either in 2021 or 2022, which requires more medical details. So before you apply, make sure you check the government website for the most recent version.
If you have a visual impairment, here’s a copy of the T2201 with large fonts.
Start by understanding the DTC eligibility criteria
Before you do anything, I want you to have some understanding of the Disability Tax Credit approval criteria. The more you know what the CRA is looking for, the smoother the application process.
Many families are not well-informed or simply clueless about it. So whenever there are any hiccups, some simply give up applying and miss out on a huge amount of benefits down the road.
Below are the details I found on the Government of Canada website. Find the row related to your disability condition, then go over the examples and videos.
| Condition | Examples of someone who may be eligible | Videos Explanation |
|---|---|---|
| Walking | “Marie injured her leg and has to use a wheelchair Marie and Joe are both retired. Marie fell off a ladder 10 years ago and injured her right leg. She now has to use a wheelchair to get around even for short distances. Marie applied for the DTC. As a result of the information provided by the medical practitioner on the application form, she is now eligible for the tax credit. Marie also got a big income tax refund for the last 10 years because her medical practitioner was able to certify that her inability to walk started 10 years ago.” | |
| Mental functions | “Christie needs daily support and supervision Cheryl and Christie have been together for 30 years. A couple of years ago, Cheryl noticed Christie was becoming confused when they were out of the house and interacting with others. Now Christie is often disoriented and misunderstands situations. When grocery shopping, she needs constant reminding about what to do and help interpreting her environment. Christie applied for the DTC. As a result of the information provided by the medical practitioner on the application form, she is now eligible for the tax credit. As Christie has little taxable income, Cheryl may claim any unused portion of the tax credit.” | |
| Dressing | “Robert’s right arm is paralyzed Robert is a veteran police officer. Last year, his right arm became paralyzed. Robert applied for the DTC. As a result of the information provided by the medical practitioner on the application form, Robert is now eligible for the tax credit because he can no longer dress himself.” | |
| Feeding | “Olga lost a limb and needs help to eat Olga lives by herself. Last year, she had an upper limb amputation. Olga now has a caregiver to help prepare her meals and feed her. Olga applied for the DTC. As a result of the information provided by the medical practitioner on the application form, she is now eligible for the tax credit because she is not able to feed herself.” | |
| Eliminating (bowel or bladder functions) | “Lali had surgery that led to complications Lali runs her own business. Recently, she had surgery and a colostomy was created. Unfortunately, it led to complications. Lali applied for the DTC. As a result of the information provided by the medical practitioner on the DTC application form, she is now eligible for the tax credit.” | |
| Hearing | “Kevin lost his hearing Kevin is an accountant. When he was a child, Kevin lost his hearing due to a head injury. Although Kevin has hearing aids, he continues to have difficulty hearing. Kevin applied for the DTC. As a result of the information provided by the medical practitioner on the application form, he is now eligible for the tax credit because of the severity of his hearing loss.” | |
| Speaking | “Joseph had his larynx removed Joseph had his larynx removed 5 years ago. Recently, he learned about the DTC and decided to apply. As a result of the information provided by his medical practitioner on the application form, he is now eligible for the tax credit because he can no longer speak. He may also be able to claim the credit for the past 5 years.” | |
| Vision | “Simon is blind Simon is a teacher. Rex is his guide dog. Last year, Simon was in a car accident that caused him to lose his sight. During his recovery, he acquired Rex, who helps him when he has to go outside his home. Simon applied for the DTC. As a result of the information provided by the medical practitioner on the application form, he is now eligible for the tax credit because he is blind in both eyes.” | |
| Life-sustaining therapy | ” Lisa’s son Nicolas needs insulin therapy Lisa is a single parent. Her son, Nicolas, needs insulin therapy. Lisa applied for the DTC for her son. As a result of the information provided by the medical practitioner on the application form, Nicolas is now eligible for the tax credit based on the time he and his mother must take to manage his treatment, and the frequency it is received. Lisa may claim the tax credit, which includes a supplement for people who are 17 years and younger at the end of the year.” “Adam needs kidney dialysis Adam is a university student. Before he got a kidney transplant, he needed kidney dialysis 14 hours per week. Adam applied for the DTC. As a result of the information provided by the medical practitioner on the application form, Adam was eligible for the credit for the period he received dialysis. As Adam has little taxable income and his parents help with his food, clothing, and shelter throughout the year, they may claim any unused portion of the tax credit.” |
source: Canada.ca- Disability Tax Credit
What is the CRA really looking for?
Broadly speaking, there are 3 conditions that the Government of Canada may approve a DTC application. They are:
- “Marked restriction” in 1 of the categories, OR
- “Significant limitations” in 2 or more categories, OR
- Receive life-sustaining therapy
The applicant only needs to fulfill one of the above to qualify for the DTC.
When they say “categories,” they are referring to the condition of walking, mental functions, dressing, feeding, eliminating, hearing, speaking, and vision.
What is a “marked restriction?”
- You are unable to do the activity, or it takes 3 times longer than someone of similar age without the impairment, even with the use of appropriate therapy, medication, and devices
- This restriction is present all or almost all of the time (generally at least 90%)
- The restriction has lasted or is expected to last for a continuous period of at least 12 months
What is a “significant limitation?”
- The 2 or more limitations exist together all or almost all of the time (generally at least 90%)
- If the limitations were combined, their cumulative effect (combined impact) would be both of the following:
- equivalent to being unable, or taking 3 times longer than someone of similar age without the impairment, to do an activity in 1 of the categories
- present all or almost all of the time (generally at least 90%), even with the use of appropriate therapy, medication, and devices
What is considered life-sustaining therapy?
- Your therapy is needed to support a vital function and may include:
- Dialysis
- Insulin therapy
- Oxygen therapy
- Chest physiotherapy
- Other therapies
- Your therapy is needed at least 2 times per week (for 2020 and previous tax years, the therapy is needed at least 3 times per week)
- Your therapy is needed for an average of at least 14 hours per week, taking time away from everyday activities
- Your impairment has lasted or is expected to last for a continuous period of 12 months
A special note that Canadians with Type 1 diabetes automatically meet the eligibility criteria under life-sustaining therapy. Therefore, medical practitioners no longer need to provide therapy details for 2021 and later years.
Do a self-assessment
Now that you should have some basic understanding of the DTC criteria, it’s time to do some self-assessment.
Click on the link(s) below that are relevant to your conditions. In there, you should see the “Eligibility criteria checklist.” The ones with the checkbox options.
In most scenarios, all the checkboxes must be selected in order to qualify for the DTC. So spend a few minutes and see if you are eligible based on those questions.
- Walking
- Mental functions
- Dressing
- Feeding
- Eliminating (bowel or bladder functions)
- Hearing
- Speaking
- Vision
- Life-sustaining therapy
This should give you an initial idea of where you stand on the application process.
(But keep in mind, you may still apply even if you’re uncertain. After all, the CRA will review your eligibility based on the information provided by your medical practitioner.)
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Let’s help out the doctor
After you have done the self-assessment, in the next step, I want you to think about what we have covered so far. Ask yourself, is your condition likely to meet the DTC requirement?
(If you are unsure, you can always review the previous sections again – especially the table with the examples and video explanations.)
Then open the file of the T2201 form, go to Part B, and review the questions in the section that is relevant to you. I know that this is to be completed by a medical practitioner, but are there any details you can provide which can be helpful to the application?
For example, I’ve worked with a lady with a mobility issue. After knowing the DTC criteria, she believes that she should qualify for “marked restriction” under walking.
Before she went to her doctor, she took notes of the frequency and severity of her disability. She also wrote down examples of how it limits her ability to walk and the impact on her daily life.
When she visited her doctor, she provided these notes to her. These details were extremely helpful to her doctor as she now has an even better understanding of what her patient is going through.
As a result, the CRA approved her application.
Yet, doctors are medical professionals but keep in mind that they are human too. So if you cannot clearly tell them about your condition, it will be difficult for them to assist you properly.
However, you should never lie or exaggerate about your situation. Just let the doctor what you know to the best of your knowledge so they can do a proper assessment for you.
Remember, there are different benefits programs available and different ways of making money, but there’s always no right way to do the wrong thing.
Bring Part B of the t2201 form to a medical practitioner
The CRA allows certain professions of medical practitioners to certify the disability tax credit form, and it really depends on the applicant’s specific “category” of disability.
| Medical practitioner | Can certify |
|---|---|
| Medical doctor | All impairments |
| Nurse practitioner | All impairments |
| Optometrist | Vision |
| Audiologist | Hearing |
| Occupational therapist | Walking, feeding, dressing |
| Physiotherapist | Walking |
| Psychologist | Mental functions necessary for everyday life |
| Speech-language pathologist | Speaking |
Some doctors may be reluctant to fill out the Disability Tax Credit Certificate for new patients because they don’t have much of their medical history and thus do not feel they can make a proper diagnosis.
Therefore, most families I’ve come across would bring the t2201 form to a medical professional who knows them well – for example, their family doctor.
Furthermore, after the pandemic, I know that many doctor appointments have been changed to phone meetings these days. If your doctor already has sufficient details on your medical condition, they can actually complete the T2201 form online without seeing you.
Here’s the link to the digital application. However, as I read on the government website, they do not recommend using Chrome browser when filling with a mobile device. Perhaps, they can try Firefox, IE, or Safari.
Here’s a DTC video for medical practitioners
You may send this video to your medical practitioner if they need help on filling it. Though, I’m doubtful whether they will watch it since many super busy these days. However, you may send it to their assistant or office staff.
Also, according to the government website, there is a slight error in the video. The T2201 application form will only be accepted if it is signed by the applicant themselves OR their legal representative. It will not be accepted if it is signed by an authorized representative in lieu of the applicant.
Fill out Part A of the application
There are 4 sections in Part A. The first and last sections are pretty strict forward, so I won’t spend time going through them.
Determine who will claim the disability amount
As mentioned earlier, the disability tax credit can be used to reduce income tax. So in section 2, you need to let the CRA know who will be claiming the “disability amount.”
This can be the disabled person or a supporting family member (i.e., the spouse or common-law partner, or a parent, grandparent, child, grandchild, brother, sister, uncle, aunt, nephew, or niece)
If the supporting family member is claiming the amount, they need to provide their personal information, details and proof of how they support the disabled individual.
I have a client with severe chronic pain, and her uncle is claiming the disability amount. Her uncle actually keeps all the grocery and clothing receipts. So when it comes to CRA audits, they can be used as proof of support to the disabled applicant.
Previous tax return adjustments
The disability tax credit can be backdated for up to 10 years. In other words, that could mean more tax refunds for you!
In section 3, you have the options to choose whether the CRA will automatically adjust your tax returns,
“If eligibility for the disability tax credit is approved, would you like the CRA to apply the credit to your previous tax returns?
- Yes, adjust my previous tax returns for all applicable years.
- No, do not adjust my previous tax returns at this time.”
On a side note, this option wasn’t available in the previous version of the application. I really like this revision as it improves the overall application experience.
Before, families would need to mail a letter to the CRA or submit a tax adjustment year-by-year. This could be daunting and troublesome for many people. In fact, I know several families who completely missed out on it until we had a conversation about it.
Anyway, everyone’s situation is different, so it’s better to confirm with your accountant about it.
Submit the disability tax credit application
Now that both Part A and Part B are completed, you should send them to the CRA if you have registered MyAccount on the CRA website.
After you log in, you may scan and upload the t2201 form through the “Submit documents” option.
I personally prefer online submission because you can get immediate confirmation that the CRA has received it, and it eliminates all the back-and-forth mailing. But if you really want to send it by mail, you can find the CRA mailing address on the last page of the application. Just look for the tax center closest to you.
Typically speaking, it takes 6 to 8 weeks for the CRA to process the disability tax credit application. Then the CRA will send you a Notice of Determination with the approval details. Here’s another post covering the next steps after your submission.
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