What is the Disability Tax Credit?
You may have questions about the Disability Tax Credit (DTC) – What is it? Do I qualify? What medical conditions make me eligible for the DTC? Do I need to have a taxable income? We are here to answer your questions, ease your frustrations and help carry the workload. Let’s start at the beginning.
The Disability Tax Credit or DTC is a non-refundable tax credit that reduces the amount of income tax paid by Canadians with disabilities. The tax credit allows some relief for costs and hardship resulting from living with a disability.
The Disability Tax Credit is also retroactive, which means you can claim up to 10 years of tax refunds resulting in up to $25,000+ in immediate payments from the CRA. In order to receive a refund from the Canada Revenue Agency, your household must have had taxable income and have been paying income taxes during the years in which you suffered from your condition(s). Individuals can transfer credits to a spouse or family member in situations where the individual with the disability does not pay taxes, but receives support from a family member who does.
Am I Eligible?
For you to be eligible for the DTC, a medical practitioner must certify that you or your dependent have a severe and prolonged impairment in physical or mental functions. The medical practitioner also needs to describe the impact of the person’s impairment on their daily life. The information included on the application by the medical practitioner is a major factor in determining ones eligibility.
Eligibility for the DTC is based on the effects of the impairment, and not on the condition itself. Despite therapy, devices and medication, a restriction must impact one or more basic daily activities at least 90%+ of the time.
There are many different ways for which a person can be eligible for the DTC and it’s tricky to give a definitive answer for everyone. The impact on the daily activity needs to have lasted, or is expected to last, at least 12 months. Both physical and mental impairments can qualify. It is recommended that individuals reach out to a professional organization to give them personalized information on whether or not they are eligible for the DTC.
To see a list of some more common disabilities/medical conditions that may qualify click here.
For more detailed information or to find out if you qualify for the DTC over the phone, Swift Disability has specialists available to answer all of your questions.