So you have submitted the Disability Tax Credit application. You have high hope for it, but it came back with a denied notice. You’re probably wondering why – Did I miss something? Or did the CRA make a mistake? Can I do anything about it?
First and foremost, don’t despair. A denied application does not mean that you will never get the Disability Tax Credit. I’ve also known families who got declined initially but approved the second time.
When a Disability Tax Credit application is denied, the applicant can appeal the decision by:
- Sending the CRA additional medical information and request a second review
- Filing an objection
- Filing an appeal to the Court
In this post, I will go over the options available if your Disability Tax Credit application is denied and how you may better prepare for round two of the progress.
Options to take after your DTC application was denied
1) Request a second review.
There are two key reasons why your DTC application might be denied.
- The CRA is not convinced that you meet the requirements for the credit.
- The application didn’t provide enough information
You should read over the “Notice of Determination” to find out why the CRA reject your application.
Bring this letter and discuss it with your doctor. Figure out if they could provide you with further medical information that can support your case. For instance,
- Updated medical reports
- A letter from a medical practitioner who is familiar with your situation
Keep in mind that you should focus on providing information that describes how the impairment(s) affects you. Sending the CRA irrelevant medical details probably wouldn’t help the approval.
Then you may log in to the CRA My Account and choose “Submit documents.”
Of course, sometimes, the decline may be simply due to an oversight on the CRA. If that’s the case, you contact them to clarify the situation.
I talked to several doctors before. Sometimes, even they feel that terminology on the DTC application might not be that straightforward or even confusing. If you want a better understanding of the DTC criteria, here’s another post you should check out.
2) File an objection
Suppose the CRA still declined your application after the second review, and you believe your disability condition should meet the DTC criteria. In that case, you may challenge the CRA’s decision by filing an objection.
You may do so online, by mail, or by delivering it in person to a tax services office or tax center.
When you file an objection, you should clearly explain why you disagree with your determination. And be sure to include all relevant facts and supporting documentation.
Keep in mind that you need to do that within 90 days of getting your notice of determination.
3) Appeal to the Court
I was reading the Global News, and a man was diagnosed with myalgic encephalomyelitis, commonly known as chronic fatigue syndrome. He revealed that he needs to take a break whenever he showers. Due to his disability condition, he can’t go out and is unable to work.
But his disability tax credit application was denied back in December 2019. So he planned to take his case to the Tax Court of Canada.
However, I’m not a legal professional. If this is the route you would like to explore, it’s better to consult a lawyer with experience handling cases like this.
Here is some info on how to File an appeal to the Court.
Just some thoughts: Although there is no limit on how many times one can apply or reapply for the DTC, applying over and over again without providing new information is not a wise decision. After all, you can’t expect a different result by merely doing the same thing.
Other changes that may make you eligible for the DTC now
1) Changes in the DTC criteria
The DTC criteria change over time. If you were declined a few years ago, you might want to check if the criteria have changed and if you now meet them.
For example, the Government of Canada has expanded the criteria for mental functions and life-sustaining in 2022. According to their website, if your application was denied on or after January 1, 2021 to June 23, 2022, you do not need to reapply.
The CRA will review your application under the new criteria. Once the review process is done, they will send you a letter with the outcome.
But keep in mind that we are only talking about the specific category under mental functions and life-sustaining therapy in this example.
Also, if your application was declined at an earlier date, and you believe that your condition meets the current DTC criteria, you may submit a new T2201 form and go through the application process again.
2) Changes to the disability condition
Some disabilities may change with time. A person might not have qualified for DTC before because they were still able to perform certain daily living activities. But as they lost those functions over the years, they could meet the DTC approval criteria.
For example, I’ve worked with a middle-aged man before. When we first met, although he already had some trouble walking, the condition was not so severe enough to impact his daily life. But as time went by, his mobility function deteriorated. He cannot walk too far away and needs to take a break even in between short distances.
Therefore, he reapplied for the DTC and finally got approved.
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Reference:
- Government of Canada – Disability Tax Credit: Our review and decision (source)
- File an objection – Income tax (source)
- Global News- Canadians with lifelong disabilities can lose disability tax credit (source)
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