Who qualifies for the Disability Tax Credit?

Did you know that that mental illness, irritable bowel syndrome and addiction may qualify for the Disability Tax Credit?

Up to 1.1 million Canadians live with disabilities and afflictions that may qualify for the Disability Tax Credit, but there are a lot of misconceptions about who may qualify for the Disability Tax Credit.

Basic activities of daily living

Eligibility for the Disability Tax Credit program does not lie with a specific diagnosis, but with how it affects “basic activities of daily living,” (BADL’s).

As there’s no medical diagnosis for “disability” – the Canada Revenue Agency (the government authority that determines who qualifies for the DTC) lists these requirements for the Disability Tax Credit:

• Do you have a restriction in a basic activity of daily living (BADL) – either walking, feeding, speaking, mental functions, vision, dressing, hearing, eliminating or bowel/bladder functions, or require life-sustaining therapy?
• Is this restriction marked or significant – either the restriction lasts for at least 12 months continuously and takes at least 3 times longer than normal to perform the BADL, or there are more than 1 restricted BADLs that are affected 90% of the time.

Kidney dialysis is an example of life-sustaining therapy that may qualify under basic activities of daily living for the Disability Tax Credit.

For example, while living with irritable bowel syndrome may qualify you or a loved one for the Disability Tax Credit, the condition does not, by itself, qualify someone for the program. The condition must be present 90 percent of the time or more and must markedly restrict a basic activity of daily living. In this example, irritable bowel syndrome must markedly restrict a basic daily activity (such as bowel or bladder elimination) 90 percent of the time to qualify.

The Canada Revenue Agency does not require a 100 percent complete inability in a basic activity of daily living (BADL) to qualify for the Disability Tax Credit. Again, the Canada Revenue Agency will make their decision based on if the basic activity of daily living is “markedly restricted” and takes the applicant an “inordinate amount of time” to perform a basic activity of daily living.

While this can be confusing, it is important to remember that eligibility is not based on a specific diagnosis. This means that many medical conditions not typically considered a ‘disability’ may qualify someone for the Disability Tax Credit. To see a list of medical conditions that may qualify you, click here.

No age limit

Did you know that there is no age limit? The Disability Tax Credit can apply to newborn babies, seniors and everyone in between.

The Disability Tax Credit can also be claimed posthumously, up to ten years, by family members. Remember, in most cases, the Disability Tax Credit can be transferred between family members and caregivers for up to 10 years retroactively. It can be a lot of work to analyze tax records for family members but this entitlement exists to make the lives easier for individuals and family members that live with disability.

Income limitations

There is no upper income limit. If you, or a loved one, has been successful in your career and lives with a disability, you cannot be penalized for claiming the Disability Tax Credit support that you qualify for.

As a non-refundable tax credit, however, you must have paid income tax to claim any Disability Tax Credit refunds. This means if you can’t claim the credit, you may still transfer the credit to a family member.

If you do a quick internet search or even speak with a friend, you will find that there are lots of misconceptions about the Disability Tax Credit and eligibility requirements. Even some medical practitioners or accountants make mistakes about Disability Tax Credit eligibility requirements.

More than half of all eligible Canadians who should be receiving the Disability Tax Credit are not receiving it – so it is important to understand common misconceptions regarding eligibility and the application process.

This summary is meant to clarify common misunderstandings about qualifying for the DTC. So, if you need more information about your particular case, schedule to speak with our specialists directly and we’ll help you figure out if you might qualify for the Disability Tax Credit.