The Disability Tax Credit: Who can claim it? How to claim it?

The disability tax credit (DTC) is a federal non-refundable tax credit that provides tax relief for individuals who have a severe and prolonged impairment in physical or mental functions. An individual is eligible for the DTC for a given tax year if ALL of the following requirements are met:

a) the individual has one or more severe and prolonged impairments in physical or mental functions;

b) the effects of the impairment(s) are such that the individual is either:

• markedly restricted (or would be but for life-sustaining therapy) in the ability to perform a basic activity of daily living such as seeing, speaking, hearing, walking, dressing oneself,   performing necessary mental functions, etc. ; or
• significantly restricted in the ability to perform more than one basic activity of daily living and the cumulative effect of the significant restrictions is equivalent to being markedly restricted in the ability to perform a basic activity of daily living; and

c) a medical practitioner certifies that the individual meets the requirements.

Form T2201 must be completed and filed by the individual with his/her tax return for the first year in which the DTC is claimed. The taxpayer must complete Part A of the form and Part B must be completed by the appropriate medical practitioner. The taxpayer may retroactively claim the credit for up to 10 years. The unused disability tax credit may be transferred to a supporting individual in certain circumstances.

The Quebec equivalent of the DTC is the amount for a severe and prolonged impairment in mental or physical functions. The criteria for the TCPMI are similar to the ones for the DTC. Form TP-752.0.14-V must be enclosed with the Quebec tax return for the first year in which the credit is claimed.

Please do not hesitate to contact your Crowe BGK advisor if you require additional information or clarification.

About the Author:

Élisabeth Daigneault, LL.B., M. Tax, is a Tax Specialist at Crowe BGK.

Connect with her: [email protected]