Disability Tax Credit & Medical Tax Claims
In order to be eligible for the Disability Tax Credit ("DTC") you, your spouse or partner, or your dependent must meet the following criteria as set out below.
First, for all applicants the impairment MUST be prolonged, or continuous in nature. Meaning, it has existed or will continue to exist for at least 1 year and it is occurring at least 90% of the time.
In addition, the person must meet ONE of the following criteria:
Is “markedly restricted”, or unable or needs a disproportionate amount of time (3X the average time needed) to perform one or more normal day to day activities.
Is “significantly restricted” in performing two or more normal day to day activities.
Requires life-sustaining therapy
These day to day activities include: speaking, hearing, walking, bowel and bladder functions, feeding, dressing, and mental functions essential for everyday living.
This information must be confirmed and completed by a Medical Practitioner on Form T2201 to be submitted to the CRA for approval. Once approved, the CRA will advise how many years your DTC is eligible and will notify you 1 year in advance of your renewal date, and again in the renewal year. Therefore, a new application does not need to be submitted each year, unless otherwise stated on your approval notice. Medical Doctors and Nurse Practitioners are able to complete any section on the form, while Specialists are restricted to the section that applies to their practice. For example, an Audiologist can certify impairment with hearing, and a Speech-language pathologist certifies speaking abilities.
If you were eligible for the DTC in previous years, you may file an adjustment request for your tax return. This can be done for up to the last ten years.
If your DTC eligible dependent does not claim all or part of their credit on their tax return, you may be able to transfer this amount to your tax return.
If your DTC eligible dependent is under the age of 18 and qualifies for the Canada Child Benefit they can receive the Child Disability Benefit.
Deductible Medical Expense for those with Disabilities:
Certain medical expenses that assist with those with an impairment attend school or work may be deductible. Examples include note taking services, reading devices, and talking textbooks to name a few.
Other deductible medical expenses include adult Diapers or disposable briefs, deaf-blind intervening services, the cost for completion of Form T2201 by your medical practitioner, prescriptions including Birth Control Pills, and standing devices.
The above information is of a general nature only and should not be relied upon for specific situations. We do not endorse the accuracy of the charts on the websites above. Click here for additional tax accounting services information.
Call Marlies Y Hendricks, CPA at 416-766-3941 to discuss your best options and set up an appointment.