Area of Law: Tax Law
Answer # 1705
Disability Tax Credit (DTC)Region: Ontario Answer # 1705
What is the Disability Tax Credit (DTC)
The DTC is a federal non-refundable tax credit that helps people with disabilities, and those supporting them, to reduce the amount of income tax they may have to pay.
The DTC can be claimed for:
- a dependant, and
- your spouse or common-law partner.
What are the criteria to be eligible for the DTC?
To be eligible for the DTC a person must be one of the following:
- markedly restricted in at least one of the basic activities of daily living
- significantly restricted in two or more of the basic activities of daily living (such as walking, hearing or speaking, and can include a vision impairment)
- in need of life-sustaining therapy.
In addition, the disability must be:
- prolonged, meaning the impairment has lasted, or is expected to last for a continuous period of at least 12 months, and
- present all or substantially all the time (at least 90% of the time).
How to claim the DTC
1. Submit Form T2201, Disability Tax Credit Certificate
Before the DTC can be claimed on your income tax return, you must prove that the person with the disability is eligible by completing Form T2201, Disability Tax Credit Certificate and submitting it to Canada Revenue Agency (CRA).
The form consists of two parts:
Part A, which is completed by the person with the disability.
Part B, which is completed by a medical practitioner who must certify that the claimant has a severe and prolonged impairment.
After Form T2201 is submitted, CRA will assess your application. They may contact you or the medical practitioner if more information is required. You will then be sent a Notice of Determination informing you if you are eligible for the DTC and for how long.
2. If you are eligible – Form T2201 approved
If CRA has approved your Form T2201 the disability amount can then be claimed on your tax return. One year before your eligibility expires, CRA will notify you, as well as give you another notification during that year.
The maximum disability amount that can be claimed for the 2019 tax year is $8,416. For the 2020 tax year, the amount has increased to $8,576.
If you qualify and were under 18 years of age at the end of the year, you can claim an additional maximum amount of $4,909 for 2019. For the 2020 tax year, the amount has increased to $5,003.
What if you are not eligible?
If you are not eligible for the DTC, CRA will tell you why. You can either write to a tax centre asking for a review of your application, or you can file a formal objection with CRA to appeal the decision. You have up-to 90 days after the Notice of Determination is mailed to you to file an objection.
For more information on the Disability Tax Credit, including complete eligibility requirements, refer to Canada Revenue Agency.
For legal advice and assistance with tax planning, a CRA tax dispute, or other tax issues, contact Tax Chambers LLP
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