The Disability Tax Credit

By Jim Murphy CPA, CGA

Did you know that if you have a severe, permanent, and prolonged inability to perform everyday tasks you can save up
to $1,400 in income tax a year and be able to claim the cost of attendant care? To qualify for the credit, you need to
have your doctor complete form T2201, the Disability Tax Credit Certificate. If you or a dependent have an impairment
in either physical or mental function that has lasted twelve months or more and that significantly impacts your ability to
do everyday tasks, then you may qualify for the Disability Tax Credit (DTC). In the case where a dependent qualifies you
can transfer any unused credit to your return. Since the credit is, at the time of this article, non‐refundable you also
need to have taxable income to benefit from the credit. Generally, seniors with income under $20,000 will not be
taxable so even if eligible for the credit there will be no tax savings.

If you think you might be eligible and able to benefit from the DTC the next step is to obtain the Disability Tax Credit
Certificate (Form T2201) from the Canada Revenue Agency (CRA) or your tax preparer. You can download a copy of the
form from the CRA website (www.cra‐agc.gc.ca/forms) or call the general inquiries line (1‐800‐959‐8281) to have one
sent to you. Once your doctor has certified that you have a qualifying disability then submit the form to CRA either
directly or with your next personal tax return.

The CRA will take several months to decide if you are eligible for the credit although in my experience once a physician
has signed the form the certificate is always granted. You will receive a letter confirming the award of the certificate
and the effective date of the credit. You will be able to request adjustments to your personal tax returns to claim the
credit back to and including the taxation year when the disability started. There is a ten‐year general limitation on
claiming credits.

Normally your doctor will charge a fee for preparing the Tax Credit Certificate (T2201). This fee is eligible for the
medical expense tax credit (METC) in the year it was paid. In addition, once eligibility for the DTC is established
expenses related to attendant care are also eligible for the METC. For example, amounts paid to a private attendant
care provider would be eligible as would a portion of the fees paid to a care home. The maximum attendant care
amount that can be claimed in conjunction with claiming the tax credit is $10,000. However, there is no limit on the
attendant care amount that can be claimed if the DTC is not claimed. So, a person with $20,000 or more in attendant
care expense would be better off claiming the attendant care amount and not claiming the DTC itself. Note that one still
must have been certified for the DTC by CRA to claim any attendant care expenses.

Remember to check the box on page 1 of the form asking CRA to adjust prior returns if the doctor indicates the
condition began more than a year ago.

For more information you can download the Disability‐Related Information guide (RC4064) from the CRA website or
have one sent to you by calling the general inquiries line. The advice provided above is general in nature and
professional advice regarding your particular situation should always be obtained before proceeding.

Jim was the volunteer Treasurer of Seniors Come Share from 2015 to 2021. He is a founding partner of Murphy and
Murphy, Chartered Professional Accountants with offices located White Rock and Tsawwassen
(www.murphyandmurphy.ca).