Disability Tax Credit (DTC)
1. What is the purpose of the DTC?
A Significant Tax Credit:
The DTC is a non-refundable tax credit designed to offset additional costs associated with physical or mental disabilities. It helps reduce the amount of income tax payable for individuals with disabilities or their caregivers. More importantly, the DTC serves as a gateway measure that qualifies individuals with disabilities for numerous other federal programs.
Eligibility to an RDSP :
The Disability Tax Credit (DTC) is a prerequisite for opening a Registered Disability Savings Plan (RDSP). The RDSP is a generous financial tool that allows individuals to receive up to $90,000 in government bonds and grants. Therefore, the DTC is a mandatory requirement for opening an RDSP, which helps save for the long-term financial security of a person with a disability.
Eligibility for the Canada Disability Benefit (CDB):
The Disability Tax Credit (DTC) will also serve as an eligibility criterion for the new Canada Disability Benefit (CDB). This government benefit aims to reduce poverty among low-income Canadians with disabilities aged 18 to 64. It will provide direct financial assistance of up to $2,400 per year. Payments to eligible recipients will begin in July 2025, following the completion of the regulatory process and consultations with people with disabilities.
Feel free to schedule an appointment to get more information at no cost.
2. How to obtain the DTC?
1. What is the purpose of the DTC?
A Significant Tax Credit:
The DTC is a non-refundable tax credit designed to offset additional costs associated with physical or mental disabilities. It helps reduce the amount of income tax payable for individuals with disabilities or their caregivers. More importantly, the DTC serves as a gateway measure that qualifies individuals with disabilities for numerous other federal programs.
Eligibility to an RDSP :
The Disability Tax Credit (DTC) is a prerequisite for opening a Registered Disability Savings Plan (RDSP). The RDSP is a generous financial tool that allows individuals to receive up to $90,000 in government bonds and grants. Therefore, the DTC is a mandatory requirement for opening an RDSP, which helps save for the long-term financial security of a person with a disability.
Eligibility for the Canada Disability Benefit (CDB):
The Disability Tax Credit (DTC) will also serve as an eligibility criterion for the new Canada Disability Benefit (CDB). This government benefit aims to reduce poverty among low-income Canadians with disabilities aged 18 to 64. It will provide direct financial assistance of up to $2,400 per year. Payments to eligible recipients will begin in July 2025, following the completion of the regulatory process and consultations with people with disabilities.
Feel free to schedule an appointment to get more information at no cost.
2. How to obtain the DTC?
A healthcare professional must complete Form T2201, certifying a severe and prolonged impairment in physical or mental functions. The impairment must result in marked restrictions in one category of daily living activities or significant limitations in at least two categories.
The eligibility criteria were expanded in the 2021 federal budget to include more disability situations. If you were previously denied the DTC, don’t hesitate to reapply. You can find an attached article by Mr. Guillaume Parent on this topic: “Living with an invisible disability? The Canada Revenue Agency wants to make your life easier!”
3. What disabilities are eligible?
It’s not the disability, diagnosis, or illness itself that makes you eligible for the DTC, but rather the prolonged effect of the impairment on your daily life that determines your eligibility. Many people are unaware that conditions such as Type 1 diabetes, Autism Spectrum Disorder, or ADHD can make a person eligible for the DTC.
For more information, please do not hesitate to contact us
4. Our commitment to you
At Finandicap, we are happy to assist you in preparing your application for the DTC. We have developed resources in collaboration with our partners that can help you during your interactions with healthcare professionals.
Please do not hesitate to make an appointment to take advantage of our free assistance.