If you or a loved one is living with a disability, you may be eligible for the Disability Tax Credit (DTC)—a valuable financial resource provided by the Canada Revenue Agency (CRA). The DTC helps reduce the amount of income tax owed for individuals with severe and prolonged impairments, as well as their supporting family members. This guide will walk you through what the DTC is, who qualifies, how to apply, and how to claim it on your tax return.
I wanted to mention that all the information in this article is based on information from the Government of Canada’s website in February 2025.
Disclaimer: This blog post is for informational purposes only and is not intended as legal or financial advice. Please consult with a qualified professional for personalized guidance regarding your specific situation.
What is the Disability Tax Credit (DTC)?
The Disability Tax Credit (DTC) is a non-refundable tax credit designed to help offset some of the additional costs associated with having a disability. Since it’s non-refundable, it reduces the income tax you owe but does not provide a refund if the credit exceeds your taxes owed. The goal of this tax credit is to ease the financial burden that comes with having a disability. Additionally, being eligible for the DTC can unlock access to other financial benefits, such as the Registered Disability Savings Plan (RDSP), the Canada Workers Benefit Disability Supplement, and the Child Disability Benefit (CDB).
Who is Eligible for the DTC?
To qualify for the DTC, you must have a severe and prolonged physical or mental impairment that significantly impacts your daily life. The impairment must affect basic functions such as walking, feeding, dressing, vision, hearing, mental functions necessary for daily life, or speaking. Your condition must be prolonged, meaning it lasts for at least 12 months. The CRA determines eligibility based on the severity of the impairment and how it affects your ability to perform everyday activities.
How to Apply for the Disability Tax Credit
Applying for the DTC involves two main steps: completing the application with a medical practitioner and submitting it to the CRA for approval. You must have your impairment certified by a qualified medical practitioner. Depending on the type of impairment, this could be a medical doctor, nurse practitioner, optometrist, audiologist, occupational therapist, physiotherapist, psychologist, or speech-language pathologist. Keep in mind that medical practitioners may charge a fee for completing the application.
You can apply for the DTC at any time during the year. However, it is recommended to submit your application separately from your tax return to avoid delays in processing. You can apply using either the digital form or the printed paper form, but choosing only one method is important to prevent delays. Once submitted, the CRA will review your application, which typically takes up to eight weeks. If additional information is needed, the CRA may contact your medical practitioner.
What Happens After You Apply?
Once the CRA has reviewed your application, they will send you a notice of determination by mail informing you of their decision. If approved, you can claim the disability amount on your tax return for eligible years. If denied, the notice will explain the reason for the decision, and you will have options to discuss the outcome, request a review, or file an objection.
How to Claim the Disability Tax Credit on Your Tax Return
If you are approved for the DTC, you can claim the credit when you file your annual tax return. The person with the disability can claim the credit on their own tax return. If they do not have enough taxable income to benefit from the full amount, they can transfer the credit to a supporting family member, such as a spouse, common-law partner, or caregiver identified on the application.
For the 2024 tax year, individuals aged 18 and older can claim $9,872, while those under 18 years old can claim an additional $5,758 supplement. The credit must be claimed on the appropriate line of the tax return, depending on whether you are claiming it for yourself, a dependent, or a spouse or common-law partner.
If you were eligible for the DTC in past years but did not claim it, you may be able to retroactively claim the credit for up to 10 years. Additionally, if you paid a medical practitioner to complete the DTC application, their fee may be claimed as a medical expense on your tax return.
Final Thoughts
The Disability Tax Credit is a valuable financial tool for individuals with disabilities and their caregivers. It not only helps reduce tax obligations but also opens doors to other government support programs. If you believe you or a loved one may be eligible, it is worth applying as soon as possible to take advantage of the available benefits. For further details, always check the CRA website for the most up-to-date information and eligibility requirements.
For information on other tax credits and financial resources, check out my Ebook located here!