With tax season fast approaching, you may be thinking about tax credits, tax slips and more. The Disability Tax Credit (DTC) is one of many tax credits available to Canadians. The process to apply for the DTC is complex. You must submit a T2201 form to establish eligibility first. Then you can claim the DTC on your income tax return.
You might be wondering, what is T2201? Where to mail T2201? How to submit T2201 to CRA? This article is a complete DTC and T2201 guide. Therefore, continue reading to learn about DTC eligibility, CRA form T2201, and more.
What is the Disability Tax Credit and T2201?
The Disability Tax Credit (DTC) is a non-refundable tax credit available to people living with disabilities. It is also available to individuals supporting persons with disabilities. The tax credit reduces the amount of income tax they pay. The rationale is individuals living with disabilities incur costs that other taxpayers don’t face. In other words, DTC enhances tax equity. Before you can claim the Disability Tax Credit, you must establish eligibility. This occurs through a form called T2201, Disability Tax Credit Certificate. Part of the process is consulting a medical practitioner. They must certify the taxpayer has severe and prolonged impairment. On the T2201, the medical practitioner must specify the effects of the impairment. Completion of the form is possible online or manually. Once your T2201 approval returns from the CRA, you can claim the DTC. Claims can either go to you, your dependent, your spouse or your common-law partner.
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What conditions qualify for the Disability Tax Credit?
Generally speaking, individuals eligible for the DTC must have a physical or mental impairment that is severe and prolonged. Eligibility for DTC falls into the following categories:
- Elimination (bowel and bladder functions)
- Mental functions required daily living
- Cumulative effect of significant limitations
- Life-sustaining therapy
Definitions related to the Disability Tax Credit are complex. Detailed definitions and explanations are available online. If you’re unsure, visit a medical practitioner. They should have knowledge of the DTC and help you determine whether you’re eligible or not. For this reason, keep in mind that eligibility for other Canadian government benefits does not ensure eligibility for the DTC. For example, if you’re claiming Employment Insurance (EI) or Canada Pension Plan (CPP), you are not necessarily eligible for the Disability Tax Credit.
Who can fill out T2201?
If you’re living with a disability that you believe meets the DTC eligibility criteria, you can fill out the form T2201. If you’re still unsure, you can complete a basic online survey. This survey will help you determine eligibility on a self-assessment basis. Once you’re ready to fill out the T2201, continue reading below.
How to get a T2201 form
You can find the Form T2201 Disability Tax Credit Certificate online. It’s best to use the PDF fillable/savable option. This one allows you to fill and save the document on a computer. If you have a visual impairment, there are options for you available. You can also print the document and complete it manually by hand.
How to complete the Disability Tax Credit Application Form
To clarify, you can complete the form online or manually. The T2201 form has two main sections. Part A includes details about the individual with a disability. The individual in question completes this part. A legal representative can also complete Part A on behalf of the individual with a disability. Part B details the physical or mental disability itself. A medical practitioner completes this part. Before you submit the form, ensure Part A and Part B have no blank sections. For Part B, see which medical practitioners can complete what:
|Medical practitioner type||Can certify|
|Medical doctor||All sections|
|Nurse practitioner||All sections|
|Occupational therapist||Walking, feeding, dressing|
|Psychologist||Mental functions necessary for everyday life|
If you incur any fees with a medical practitioner to complete Part B, they are your financial obligation. Fortunately, you can claim them as medical expenses on your tax return. Be sure to keep the receipts.
Where can I send form T2201?
Once Part A and Part B are complete, you can send your T2201 form for approval. You can either submit online or by mail. If online, you can submit through Canada Revenue Agency My Account or Represent a Client, if you’re a legal representative. If by mail, you can submit it to your nearest tax center.
How much is the credit for 2021?
The maximum amounts for the 2021 year have not become available from the CRA yet. However, the 2020 amount is a good benchmark. The maximum disability amount was $8,576 in 2020. The maximum supplement for persons under 18 was $5,003. Keep an eye out for the 2021 amounts in early 2022.
What if my Disability Tax Credit claim is denied?
If your T2201 form is denied, you cannot claim the Disability Tax Credit. Before doing anything else, figure out the reason for denial. If you can fix it, you can try to resubmit your application. If you are not eligible because your disability does not fit the criteria, you might be out of luck with the DTC. However, if the DTC is not available to you, consider researching other options. In that case, you may be eligible for other tax credits or financial support. For example, caregiver tax credits, eligible dependent tax credits, medical expense tax credits and so on.
Disability Tax Credit and You
If you or a loved one is living with a disability, the DTC can help you alleviate financial burdens. Even though the process of applying for the disability tax credit (DTC) can seem daunting, it’s worth it. If you need any help navigating personal finances, tax credits or applications, Consolidated Credit can help. Reach out to an expert today!