The Disability Tax Credit (DTC) is a non-refundable tax credit offered by the Government of Canada to individuals with a severe and prolonged physical or mental impairment. Its primary purpose is to help offset the extra living costs that can arise from living with a disability. By reducing the amount of income tax that a person with a disability—or their supporting family member—may have to pay, the DTC offers meaningful financial relief.
To be eligible for the DTC, the individual must have a significant impairment that is expected to last at least 12 months and must have a medical practitioner certify the condition through the Disability Tax Credit Certificate (Form T2201). The impairment must markedly restrict the person’s ability to perform basic activities of daily living, such as walking, feeding, dressing, or mental functions necessary for everyday life. There are also provisions for individuals who may not be markedly restricted in one function but are significantly restricted in multiple functions.
Once approved, the DTC can be claimed for the current tax year, and retroactive claims can be made for up to 10 previous years if eligibility existed. The credit reduces taxable income and can lead to significant savings, especially when combined with other disability-related benefits like the Registered Disability Savings Plan (RDSP) or the Child Disability Benefit.
Additionally, if the person with the disability does not have taxable income or cannot fully use the credit, they may transfer the unused portion to a supporting relative—such as a parent, spouse, or sibling—who helps with care. This makes the DTC a valuable tool not just for individuals living with disabilities, but also for their families and caregivers.
To be eligible for the DTC, the individual must have a significant impairment that is expected to last at least 12 months and must have a medical practitioner certify the condition through the Disability Tax Credit Certificate (Form T2201). The impairment must markedly restrict the person’s ability to perform basic activities of daily living, such as walking, feeding, dressing, or mental functions necessary for everyday life. There are also provisions for individuals who may not be markedly restricted in one function but are significantly restricted in multiple functions.
Once approved, the DTC can be claimed for the current tax year, and retroactive claims can be made for up to 10 previous years if eligibility existed. The credit reduces taxable income and can lead to significant savings, especially when combined with other disability-related benefits like the Registered Disability Savings Plan (RDSP) or the Child Disability Benefit.
Additionally, if the person with the disability does not have taxable income or cannot fully use the credit, they may transfer the unused portion to a supporting relative—such as a parent, spouse, or sibling—who helps with care. This makes the DTC a valuable tool not just for individuals living with disabilities, but also for their families and caregivers.
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