How does the disability tax credit work?

People with disabilities face costs that other taxpayers don’t, such as attendant care, special devices and computer software. In addition, they are more likely to be able to work only part-time or be unemployed.

The Canadian government offers a number of tools to assist them financially. Some of these benefits can be claimed by the parents of a disabled person.

What is the disability tax credit?

This is a non-refundable tax credit for the disabled or those who are supporting a disabled person. 

Amounts for 2025 (for the 2024 tax year)

Here are the current amounts you can claim under the DTC:

• Base amount for individuals 18 years and older: $9,872

• Supplemental amount for children under 18: $5,758 

• So, if you’re under 18, and qualify, the total you can claim is $9,872 + $5,758 = $15,630

How does the disability tax credit work?

It allows you to claim the disability amount on your tax return. It’s a non-refundable tax credit that helps to reduce your taxable income, which means that if your taxable income is negative you will not receive a tax refund based on the disability tax credit.

The 2025 amounts ($9,872 federal, $16,882 Alberta) are not refunds. They are multiplied by the lowest tax rate for that level of government to reduce your tax payable.

Here’s what that looks like for 2024/2025 tax year:

So, if you qualify, you’d reduce your total tax bill by about $3,169 combined — even if you have no income beyond the basic personal amount, you can transfer this to a supporting family member so it still gets used.

Who is eligible for the disability tax credit?

The disability tax credit does not speak to specific medical conditions. Instead, it is based on impairment of physical or mental abilities that is severe and prolonged, and that have resulted in marked restrictions on a person’s ability to work and lead a normal life.

Some of these conditions include:

• Vision
• Speaking
• Hearing
• Eliminating (bowel control)
• Feeding
• Dressing
• Mental function for everyday life
• Life-sustaining therapy

For example, a life-sustaining therapy could be testing and ongoing insulin treatment that takes 14 hours or more a week. However, if you have diabetes and manage your symptoms through diet, this would not qualify as a disability because it does not prohibit you from doing everyday activities.

Typically, a prolonged impairment is seen as a minimum of 12 months. If the disability continues after that time, it would be an ongoing disability and the person would be eligible for the tax credit.

What’s considered severe? It means that someone with a disability takes an inordinate amount of time to accomplish a task (typically three times as long). It should also have an impact 90 percent of the time.

Steps to claiming the disability tax credit

If you think you qualify for the credit, you can ask a medical practitioner to fill out the Disability Tax Credit Certificate. This is a 16-page document that covers all of the conditions mentioned above.

However, submitting a certificate does not guarantee that the Canada Revenue Agency will automatically let you claim the tax credit. They will make this determination.

In addition, the fact that you receive payments for other disability programs does not mean you will automatically qualify for the tax credit. This applies to the Canada Pension Plan disability benefit, workers’ compensation and private disability insurance. These programs may have different disability criteria than those set out by the CRA.

Can you claim a retroactive CRA disability tax credit?

Yes, if you did not claim this credit in past years, you can apply for it retroactively. You can claim up to 10 years. However, the CRA may request a medical practitioner’s certificate for these retroactive claims.

How is the disability tax credit calculated?

The Canada Revenue Agency determines whether you qualify for the tax credit. If you do, you can claim the full credit when you file your tax return.

Is the disability tax credit a monthly payment?

No, you claim the non-refundable credit when you file your tax return.

Other supports for those with a disability

In addition to the disability tax credit, you may be eligible for other benefits, including:

• The disability supports deduction: You can claim expenses that allow you to go to school or work. These could include an attendant to care for you, special software for your vision and tutoring services.
• Medical expenses: You can claim prescription drugs and devices to help you manage your disability. However, you can’t submit receipts for these expenses if you have already claimed them under the disability supports deduction.
• Registered Disability Savings Plan: This is a savings plan to help the parents of a disabled child or adult to ensure the long-term financial future of the disabled person. The plans may be eligible for grants and bonds from the government of Canada.
• The child disability benefit: This is a tax-free monthly payment to families who have a child under the age of 18 who has a severe and prolonged impairment in physical or mental functioning. The current maximum benefit is $2,915 per year. The amount you receive is based on your family net income, with low-income earners receiving the maximum.

As you can see, the disability tax credit can be complicated. Simply having a disability does not necessarily mean that you can claim this credit on your tax return. It must have a prolonged and severe impact on your life. The best place to start is by visiting the Canada Revenue Agency site and seeing who is eligible. This will give you a good idea to whether you are eligible.

In addition, be sure to check out the other benefits available to people with a disability. Even if you are not eligible for the disability tax credit, you may be able to claim medical and support expenses.