If you have a disability and are a Canadian citizen — or have been a permanent resident of Canada for at least 18 months — you can apply to the CRA for the Disability Tax Credit. Form T2201 has two parts: Part A is filled out by you, the taxpayer, and Part B by a medical doctor, and the completed form is submitted to the CRA for approval. If you have a CRA My Account you can do this online, and your doctor can access the form there to complete Part B. Be sure to tick the box asking the CRA to adjust your returns for all affected years.
Even a temporary disability could qualify you for a period of time* — but only your doctor will know whether you qualify, based on the questions on the form.
How does the credit benefit you?
If you earn enough income, it reduces the taxes you pay — much like buying an RRSP does. “I’m low income and not able to work, so how will this help me?” Good question. If you are between the ages of 18 and 64 there is, at the time of writing, up to a $204.20 monthly credit you can receive — so paying a doctor to fill out the form is well worth it. The more income you have, the lower this amount becomes, and there is a cut-off income above which you won’t qualify. It can change every year, so it’s good to check.
Approval takes time
It will take time for the CRA to approve your application. Once approved, if you qualify for the $204.20 a month you may also qualify for it retroactively — going back up to 24 months.**
Once you’re approved
Let your tax preparer know so they can claim the credit on your return. Some people have their spouse or child — whoever is their caregiver — claim the credit on their taxes instead. In that case it’s a good idea to have the same preparer do all of the returns.
* For example, someone with medical issues that will take an extended amount of time to recover from.
** Depending on how far back your disability goes.
