The DTC reduces federal taxes by up to $1,481 per year ($9,872 × 15%). Children get an additional supplement. Retroactive claims go back up to 10 years.
The Disability Tax Credit (DTC) is one of Canada's most valuable — and most under-claimed — non-refundable tax credits. If you or a dependant has a severe and prolonged impairment in physical or mental functions, the DTC can save thousands of dollars in federal and provincial taxes every year. It also unlocks access to the Registered Disability Savings Plan (RDSP) and several other programs. Yet the CRA estimates that hundreds of thousands of eligible Canadians have never applied.
The DTC is a non-refundable federal tax credit that reduces income taxes for Canadians with severe and prolonged physical or mental impairments. "Non-refundable" means it reduces taxes to zero but doesn't create a cash refund on its own — however, unused DTC amounts can often be transferred to a supporting family member who does have taxes owing.
To claim the DTC, you must be certified as eligible by a medical practitioner using Form T2201 (Disability Tax Credit Certificate). The CRA reviews the form and decides whether you qualify. Once approved, the DTC applies for each year you meet the eligibility criteria — and you can apply retroactively for up to 10 prior years if you were eligible but never claimed.
| Credit Type | 2025 Amount | Federal Tax Savings (×15%) |
|---|---|---|
| Basic disability amount (adult) | $9,872 | $1,480.80 |
| Supplement for children under 18 | $5,758 | $863.70 |
| Maximum for child under 18 (base + supplement) | $15,630 | $2,344.50 |
The CRA defines eligibility based on whether the impairment markedly restricts (or would markedly restrict without therapy) a basic activity of daily living. Basic activities include:
"Prolonged" means the impairment has lasted or is expected to last at least 12 continuous months. "Markedly restricts" means the person is unable to perform the activity, or takes 3 times longer than a person without the impairment, all or substantially all of the time (90%+).
Cumulative effects of multiple impairments that together are equivalent to a marked restriction may also qualify under the "cumulative effect of significant restrictions" rules, introduced in 2021.
Form T2201 requires certification by a qualified medical practitioner. Which practitioner can certify depends on the type of impairment:
If the person with the disability doesn't have enough taxable income to fully use the DTC, the unused portion can be transferred to a supporting individual. Eligible supporting persons include a spouse/common-law partner, parent, grandparent, child, grandchild, sibling, aunt, uncle, niece, or nephew. The transfer is claimed on Schedule 2 of the T1 return.
If you or a dependant were eligible for the DTC in prior years but never applied, you can submit a T2201 today and request retroactive adjustments going back up to 10 years (or to the year the condition began, whichever is fewer). The CRA will process T1 adjustments for each eligible year and issue refunds for overpaid taxes plus applicable interest (interest is paid by the CRA on retroactive refunds if the delay was their fault, which is rare). This can result in substantial lump-sum refunds for long-standing conditions.
DTC eligibility is a prerequisite for opening a Registered Disability Savings Plan (RDSP). The RDSP offers Canada Disability Savings Grants (up to $3,500/year from the federal government for low-income families) and Canada Disability Savings Bonds (up to $1,000/year for low-income individuals) — making DTC certification extremely financially valuable beyond the credit itself.
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