Before applying for the disability tax credit program, we would like to educate you on who is eligible for the tax credit. You are eligible if you have difficulties with your vision, speaking, hearing, walking, elimination (bowel or bladder functions), feeding, dressing, or performing the mental functions necessary for your everyday living. Furthermore, you may also be eligible if you have had life-sustaining therapy or cumulative effects of significant restrictions in two or more basic activities of living, including vision. Two conditions must be met for patients undergoing life-sustaining therapy. Firstly, this therapy must be needed to support a vital function, even if the therapy has alleviated your symptom. Secondly, therapy must occur at least 3 times per week lasting an average of 14 hours per week.
There are four questions on Form 2201 which determine if you are eligible for the Disability Tax Credit. To be eligible, the answer yes must apply to all four questions. The questions are as followed:
- Does your patient have an impairment in physical or mental functions that has lasted, or is expected to last, for a continuous period of at least 12 months?
- Even with appropriate therapy, medication, and devices, has the impairment resulted in a significant restriction, that is not quite a marked restriction (defined below), in two or more basic activities of daily living or in vision and one or more of the basic activities of daily living?
- Do these significant restrictions exist together, all or substantially all of the time (at least 90% of the time)?
- Is the cumulative effect of these significant restrictions equivalent to being markedly restricted in a single basic activity of daily living (see examples below)?
Disability Tax Credit Application Form
To apply for the Disability Tax Credit, Form 2201 – Disability Tax Credit Certificate must be completed. This form must be completed by a registered medical practitioner. Qualified registered medicalpractitioners include a medical doctor, physiotherapist, optometrist, psychologist, occupational therapist, speech-language pathologist, and audiologist. It is this form which contains your disability information, such as requiring the date at which the disability began. This tax credit includes a Federal and Provincial component.
Disability Tax Credit Types
The Disability Tax Credit is available for both children and adults with disabilities. For those under the age of 18, the government offers two types of support programs, including the Child Disability Benefit (CDB) and the Canada Child Tax Benefit (CCTB). Child Disability Benefit is a tax-free monthly sum paid to families caring for a child with a severe or prolonged physical or mental impairment. This monthly amount varies depending on the number of children in the family, the family income, the number of children with disabilities, etc. The CDB is paid as a monthly supplement to the Canada Child Tax Benefit, which is a tax-free monthly payment to support the cost a family incurs when raising a child with a disability. This benefit may include the Child Disability Benefit. To be eligible, the child must be under 18 and be living with you. You must be responsible for caring for the child, be a resident of Canada, and your spouse or common-law partner must be a Canadian citizen or permanent resident of Canada.
Disability Tax Credit Conditions
Please note that the Disability Tax Credit is only available to those with taxes payable. In the instance where one’s taxes owed is less than the Disability Tax Credit, either the entire disability amount or a portion of the amount may be transferred to a spouse, common-law partner, or any other supporting person.