The Disability Tax Credit (DTC) is available for individuals with a severe and prolonged physical or mental impairment that has lasted or is expected to last for a continuous period of at least one year. It provides a non-refundable tax credit used to reduce the income tax of a person with a disability. Should that individual not have any taxable income, a parent or caregiver can claim the DTC under certain conditions.
Eligibility is based on how the disability impacts a person’s activities of daily living* or if life-sustaining therapy is required rather than a medical diagnosis, and is subject to approval of the DTC Certificate form by the Canada Revenue Agency. If the onset of the disability pre-dates the approval, a tax adjustment can be requested for up to 10 previous years, resulting in substantial retroactive tax refunds. Approval can also open the door to other valuable financial assistance programs such as the Registered Disability Savings Plan and the Child Disability Benefit.
*Activities of daily living include: speaking, hearing, seeing, walking, elimination (bowel and bladder functions), eating, dressing and mental functions for everyday life (ie. memory, problem solving, judgement, etc.)