The disability tax credit (DTC) to available to someone who meets certain criteria under the Income Tax Act. The credit may also be transferred to another person in certain circumstances. If a person was eligible for the DTC some years ago, but did not claim it, it is possible to go back up to ten years to claim it.
As the credit could yield a potential tax savings of approximately $1,700 per year for an adult and $2,500 per year for a child under 18, this article aims to provide some key information to help you determine whether you or someone that you know may qualify for the DTC. Note that the tax savings comes from a reduction of taxes payable. If a person has minimal income, then there may not be any taxes payable and therefore, no tax savings.
There are 9 situations in which a person may qualify for the DTC. They are vision, speaking, hearing, walking, eliminating (bowel or bladder functions), feeding, dressing, mental functions and life-sustaining therapy. The impairment in these activities must be expected to last over one year and is present at least 90% of the time, even with appropriate devices, medication and therapy (except for life-sustaining therapy).
And the activity must be either “marked restriction” or “significant limitation”, which generally means it would take 3 times longer than someone of similar age without the impairment to do the same activity or a combination of 2 or more activities.
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