Disability Tax Credits Canadians need to know


Living with a disability, whether mental or physical, can greatly affect your day-to-day life – especially financially. Often, disabled taxpayers have some unavoidable additional expenses that others don’t have to face, and they can quickly add up. To offset these additional costs, Canadians with disabilities are offered some special tax credits and deductions.

But what exactly are these tax benefits and how can you claim them come filing time?

What is the Disability Tax Credit?

Perhaps one of the most important credits for those living with a disability is the Disability tax credit (DTC) – a non-refundable tax credit that reduces the taxes payable by Canadians with severe and prolonged physical or mental impairment.

But why is it one of the most important? Because being eligible for the DTC not only allows you to claim a federal maximum of $8,416 plus an additional supplement of up to $4,909 for those under the age of 18 (for 2019), but it can open the door to other federal, provincial, or territorial programs. These include the registered disability savings plan, the disability component of the Canada workers benefit and the child disability benefit.

It doesn’t just stop there, if you’re eligible for the federal DTC you can also claim the corresponding provincial/territorial tax credit, and if in previous years you didn’t claim these, you can request an adjustment for up to 10 years.

In order to qualify for the DTC, you’ll have to have a medical practitioner both certify that you indeed have an impairment and describe its effects on your life on Form T2201, Disability Tax Credit Certificate.

A pro tax tip to keep in mind is that you can claim the DTC amounts for yourself or a dependant with a disability. If you don’t need the full credit to bring your tax payable to zero, you can also transfer all or part of it to your spouse or common-law partner, or another supporting person.

Disability Medical Expenses.

In addition to the DTC, you’re also able to claim medical expenses for certain medicines, devices and treatments. A few medical expenses that are most likely to apply if you have a disability include expenses associated with having a service animal, accessible computer software, changes you made to your home or car to make it more accessible and also sign-language interpretation services.

Additionally, if you have considerable medical expenses and are also considered low income, you may be eligible for the refundable medical expense credit. Unlike the DTC, if you don’t have any income tax to pay, this credit will give you a refund to the tune of $1,248.

Avoid paying GST/HST.

If you live with a disability, there are goods and services that you don’t have to pay service or sales taxes on. This includes things like hospital parking, medical devices, home-delivered meals, and specially equipped motor vehicles.

On the off chance you paid tax in error, you can always ask the supplier for a refund or credit. But, if they don’t give you a refund, you’ll have to apply to the CRA for a rebate by filling out Form GST189, General Application for Rebate of GST/HST.

The Home Buyer’s Plan.

As part of having a disability, you may need to buy or build a home that works for you. To help offset these costs, there is the Home Buyers’ Plan (HBP). As of 2019, this is a program that allows you to withdraw up to $35,000 from your registered retirement savings plans to buy or build a qualifying home for yourself or for a related person with a disability. Normally you have to be a first-time homeowner in order to participate in the Home Buyers Plan. However, for persons with disabilities, this requirement is lifted.

With the HBP, you can withdraw from more than one RRSP as long as you are the owner of each account and are a first-time home buyer.

Although living with a disability comes with its challenges, remember that you can get some support – especially when it comes to taxes. To be sure you’re getting what’s yours contact your local H&R Block location and talk to a Tax Expert.