Digital Disability Tax Credit(DTC)

Disability Tax Credit (DTC) can now be filed online by medical practitioners. The paper version of form T2201 is still available for download at the CRA website but given postal delays and longer processing times for the paper version of the form, filing digitally is strongly advised.

First lets discuss what is the DTC. DTC is a non-refundable tax credit intended to partially offset the costs related to impairments for people with various physical and psychological disabilities, or their families who care for them. In order to receive the DTC, qualifying individuals or their family members need to apply for the credit. Individuals with impairment can apply for the DTC at anytime during the year but if they submit their application with their annual tax return, it may result in significant delays in the assessment of their return. Applying for the DTC is crucial for persons with disability as it is a requirement for applying for other types of benefits such as the Registered Disability Savings Plan (RDSP), Canada Workers Benefit (CWB), and Child Disability Benefit. We will discuss these benefits in future blogs.

There are three steps for receiving the DTC:

Certification of the impairment by a medical practitioner who specializes in the type of impairment

Approval of the DTC by the Canada Revenue Agency

Claiming the credit on the individual's or their caregivers' tax return

To be eligible the medical practitioner will have to certify that the individual has a severe or prolonged impairment in 1 of the categories, significant limitation in 2 or more categories, or receive therapy to support a vital function,h5>The categories are:

Walking: assessed by a physiotherapist

Mental functions: assessed by a psychologist

Dressing: assessed by a occupational therapist

Feeding: assessed by a occupational therapist

Eliminating (Bowel or bladder functions): assessed by a medical doctor

Hearing: assessed by a occupational audiologist

Speaking: assessed by a speech-language pathologist

Vision: assessed by a optometrist

Life-sustaining therapy

Regardless of which version of the form is used (paper or digital), the medical practitioner will complete part “B” of form T2201. Part “A” is dedicated to the details of the individual with impairment and their caregiver (where applicable). In the digital version of the form, once the medical practitioner completes part “B” online, the form is downloaded in PDF format and handed over to the individual with impairment to complete part “A”.

There are two ways to submit the form:

The individual may submit the digital copy of the form by signing into their CRA “My Account” and select “Submit Documents”

By mail to one of the tax centres in Sudbury, Jonquière, or Winnipeg

It will take approximately eight (8) weeks for the CRA to render a decision. The decision will be confirmed either by a hard-copy letter or by email if the individual has opted for CRA online mail. Upon approval, the individual may claim the DTC on their tax return or if they can not use the entire amount, they may transfer the remainder. DTC claimants who are 18 years of age on the last day of the tax year may claim the base disability amount (2021: $8,662). Claimants who are 17 years old and younger may also claim the supplemental amount for children with disabilities (2021: $5,053).

If the individual with the impairment was eligible for the DTC but they did not claim the disability credit amount, they are able to go back and claim for the previous ten (10) years.

For further information contact Softron at 1-877-SOFTRON or visit www.softrontax.com