The disability tax credit is a tax credit for qualified persons with disabilities. The purpose of the disability tax credit is to reduce the amount of income tax you pay. The disability tax credit can be awarded retroactively, which can result in you getting paid a tax refund from previous years.
WHO IS ELIGIBLE FOR THE DISABILITY TAX CREDIT
To be eligible for the disability tax credit you must have a “severe and prolonged impairment” as defined by the Disability Tax Credit Program. The definition of disability for the disability tax credit is different from those of other disability income plans, like the Canada Pension Plan, Workers compensation programs, or disability insurance plans.
You may qualify for the disability tax credit if you meet one of the following impairments or restrictions:
- You are blind
- You are “markedly restricted” in at least one of the basic activities of daily living
- You are “significantly restricted” in two or more of the basic activities of daily living
- You need life-sustaining therapy
In addition, your impairment must be “prolonged”, meaning that it is present at least 90% of the time and has lasted or is expected to last continuously for at least a year.
HOW TO APPLY FOR THE DISABILITY TAX CREDIT
You apply for the disability tax credit by submitting Form T2201- Disability Tax Credit Certificate. This is a form that must be filled out and certified by a medical practitioner.
Form T2201 has a Part A and a Part B. You fill out Part A and your medical practitioner fills out Part B.
You submit the application by sending completed Form T2201 along with any supporting document to your local tax centre.
WHAT MEDICAL PRACTITIONERS CAN FILL OUT PART B OF THE T2201 FORM FOR THE DISABILITY TAX CREDIT?
A medical practitioner is not limited to your family doctor. It includes several health professionals including, medical doctor, nurse practitioners, optometrists, audiologists, occupational therapists, physiotherapists, psychologists, and speech-language pathologists.
The medical doctor and nurse practitioner can certify all sections of the Form. Other practitioners can certify sections related to their area of expertise:
- Occupational Therapists can certify impairments with walking, feeding, dressing, and the cumulative effect of these activities
- Physiotherapists can certify impairments with walking
- Optometrists can certify impairments with vision
- Psychologists can certify impairments with performing the mental functions of everyday life
- Audiologist can certify impairments of hearing
- Speech-Language pathologists can certify impairments with speaking
APPEALING A DISABILITY TAX CREDIT DENIAL
If Revenue Canada denies your application you have the option to appeal the denial or to re-apply. You must file a Notice of Objection (Form T-400A) within 90 days of receiving Revenue Canada’s letter denying your claim for the disability tax credit. An appeal officer with Revenue Canada will review your objection and decide to approve or deny your application.
If you receive an unfavourable decision from the Revenue Canada’s appeal officer, you can file a Notice of Appeal to the Tax Court of Canada. The Tax Court of Canada is a special court that hears all appeals related to income tax decisions by Revenue Canada, including decisions about the disability tax credit. The Tax Court will schedule your case for a hearing and you must attend to give testimony and verbal arguments to support your case. Many people will have a lawyer represent them at this hearing to assist with presentation of evidence and verbal submissions to the judge. Representatives from Revenue Canada will also appear at the hearing to give evidence and arguments for why your clam should be denied. After hearing from both sides, the judge will normally give a written decision within a few months after the hearing.