In Canada, people with disabilities face a lot of problems when it comes to money. They often don’t have enough money and struggle to find jobs. The government doesn’t provide enough support to help them. As a result, many people with disabilities end up living in poverty. This is made worse because of the extra cost that comes with living with a disability.
The Disability Tax Credit (or DTC for short) is a financial benefit. It can help many people with a disability and their families. This tax credit is about helping with some of the increased costs that come with having a disability. It can help people reduce the amount of taxes they have to pay.
But there are problems with the DTC. These have been shown in research and reports. Some people with disabilities have even given up trying to apply. These are the main problems:
- The application process is complicated.
- A doctor or medical professional has to fill out parts of the application.
- There are fees to have a medical exam.
- The definition of ‘disability’ is not inclusive.
Inclusion Canada wants a better definition of disability to be used.
We feel the one that is used in the Accessible Canada Act is better. This definition is also in the Convention on the Rights of Persons with Disabilities.
There are also other benefits linked to the DTC. People need to be approved for the DTC before they can get these. This means they miss out on those benefits. We encourage everyone to apply and go through the process so you don’t miss out.
This blog will help you understand:
- What the DTC is
- Why it is important
- How it works
- How to apply
- And places and other resources to get help
What is the Disability Tax Credit (DTC)?
If you work or make money, you might pay some of your money to the government each year in the form of taxes. The Disability Tax Credit (DTC) can help to reduce the amount of income tax that a person with a disability (or their supporting family members) might have to pay. It was designed to help cover some of the extra costs related to disability.
The DTC is non-refundable. This means that it can help you pay less taxes, but you will not get any money back.
We all know there are many challenges with the DTC. It’s not perfect. We will continue to work to change this, but right now it can be an important tool to help you financially.
Even if you don’t work or make money, you should still apply. The DTC is how you can get other benefits that might help you. The DTC can open the door to other federal, provincial, or territorial programs such as:
- The Canada Workers Benefit Disability Supplement
- The Child Disability Benefit
- Canada Caregiver Credit
- Home Accessibility Tax Credit
- The Registered Disability Savings Plan
Also, you may able to claim certain medical expenses if you are eligible for the DTC.
Soon we hope that the new Canada Disability Benefit will become law. Many people hope that you won’t have to get the Canada Disability Benefit through the DTC, but this might be possible, at least in the first year. This is another reason we encourage you to apply for the DTC.
Who is eligible for the DTC?
A person of any age, including children and seniors, can be eligible for the DTC, if they meet all the rules. You may be eligible for the DTC. You may be able to claim this credit for yourself, or on behalf of your dependent, spouse or common-law partner.
In 2022, some of the eligibility criteria for the DTC changed. This means that the government changed the rules about what type of disabilities are eligible for the DTC. Now there is a larger list of disabilities that qualify. This means that more Canadians could get the DTC.
What’s New:
One example of changes that the government made is about how you think, act, communicate, and express yourself (mental functions). The government considers many things that affect the way a person functions in their everyday life, including mental functions. They have made a new and larger list of mental functions so that more people may get the DTC.
The new list of mental functions includes:
- Adaptive functioning
- Attention
- Concentration
- Goal setting
- Judgment
- Memory
- Perception of reality
- Problem-solving
- Regulating behaviour and emotions,
- Verbal and non-verbal comprehension
The old list of mental functions only included:
- Adaptive functioning
- Memory
- Judgement, problem-solving, and goal setting (were considered as a group and not individually)
To learn more about these changes click here.
How to apply for the DTC
You can apply for the DTC by paper form, or by online form. The DTC is retroactive. This means that if you (or your supporting family member/s) have been living with a disability for years before applying, you can claim the DTC for up to 10 years before.
The application for the DTC has two parts:
- Part A has to be filled out by the applicant (the person with the disability or their legal representative).
- Part B has to be filled out by a medical professional (doctor, nurse, occupational therapist, or other qualified health professional).
- Once both parts of the form are done, you will need to sign it and send the form to the federal government Department of Canada Revenue Agency (CRA), through your CRA My Account (if you have an electronic account) or by mail.
The Canada Revenue Agency will send you a letter to let you know if you are eligible or not. This is called a ‘Notice of Determination’. The CRA tries to review applications within 8 weeks, but it can sometimes take longer. You can check how long it’s currently taking by clicking here.
Useful Resources about the DTC:
The government is working on a new fully digital application for the DTC. We’re not sure how accessible it is, but if you want to learn more about it, they’re having a webinar.
The webinar will be on Wednesday, June 14, 2023. You can register here.
In the webinar they will share information about:
- How to apply for the DTC
- How to do the new fully digital application for the DTC
- Any questions you might have
- Helpful services and tools.
There are many good places online to learn more about the DTC or to get help applying for it.
One helpful tool it called the DTC Tool. You can find the DTC Tool by clicking here. This website will ask you some basis questions and will automatically fill out a form for you to take to your doctor to help them with the application.
Here are some other helpful resources:
- Guide to the DTC and RDSP for Newcomers with Disabilities, Plan Institute
- The DTC Help Sheet, Disability Alliance BC
- DTC Guide – Over 50, Plan Institute
- Other Benefits of the DTC, Disability Alliance BC
Many people don’t know that being approved for the DTC can open many doors and allow you to apply for other federal, provincial, and territorial programs. The DTC is meant to help you, so applying is something you should consider if you are eligible for the program. We invite you to explore this potential opportunity.
