What is the Disability Tax Credit?
In Canada, the federal government offers the ability for people with impairments, or their supporting family member, to apply for a disability tax credit (DTC) to reduce the amount of income tax they are obligated to pay. The goal of the DTC is to reduce income tax payments to allow for that money to be relocated to pay for additional costs associated with a person’s impairment.
Who is Eligible?
There are three ways to be eligible for the DTC. The first way is that a person with an impairment must have a medical practitioner certify that they have a severe and prolonged impairment in 1 of the categories. The second way is that a person with an impairment must have a medical practitioner certify that they have significant limitations in 2 or more categories. The final way for a person with an impairment to be eligible is if they have a medical practitioner certify that they receive therapy to support a vital function.
The categories mentioned above include:
- Mental functions
- Eliminating (bowel or bladder functions)
- Life-sustaining therapy
If the application is made under the “mental functions” category, ninety percent of the individual’s daily life must be markedly restricted because of the assessed and diagnosed condition that is affecting mental functions. The medical practitioner (like a registered psychologist) who is completing the relevant section of the DTC form, needs to explain in detail how the condition markedly restricts 90% of daily living.
The medical practitioner is able to indicate the date of onset of the condition, which may precede the date of assessment and diagnosis.
What is the Application Process Like?
Once a medical practitioner has certified the effects of the impairment, a person with an impairment is able to apply for the DTC any time throughout the year. However if possible, it is recommended to submit your DTC application before you file your tax return to avoid a delay in your tax assessment.
The application for the DTC is provided as a digital form or as a paper form, both of which are available on Canada.ca.
When Will I Know if My Application is Approved?
Typically, the CRA processes DTC applications within 8 weeks of receiving it. Once the CRA decides on the status of the application, a notice of determination will be mailed to you.
What Do I Do if My Application is Approved?
If your application is approved, you are able to claim the DTC on your income tax return. Additionally, you may also be eligible for other federal, provincial, and territorial programs.
To find out more about the DTC, I recommend you visit the Disability Tax Credit (DTC) page on the Canada.ca website : More Information