The Disability Tax Credit (DTC) is a non-refundable federal tax credit for Canadians with a severe and prolonged impairment in physical or mental functions. It recognizes that people with disabilities face greater costs of living that cannot easily be quantified and deducted. The credit reduces the federal income tax otherwise payable, and if you cannot fully use the credit yourself (because you don't have enough income), it can be transferred to a supporting family member.
For 2025, the federal DTC base amount is approximately $8,870, generating a federal tax reduction of about $1,331 (15% × $8,870). Children under 18 are eligible for an additional supplement of approximately $5,173, bringing the total federal credit for a child with a disability to around $2,107 in tax savings. Provincial credits provide additional relief.
To qualify, a person must have a severe and prolonged impairment — meaning the impairment has lasted or is expected to last at least 12 consecutive months — that markedly restricts their ability to perform one or more basic activities of daily living, including:
A person may also qualify if they require life-sustaining therapy — such as dialysis or insulin therapy for Type 1 diabetes — that takes at least 14 hours per week.
The DTC application process uses Form T2201 (Disability Tax Credit Certificate). The form has two parts:
The completed form is submitted to CRA (by mail or online). CRA reviews the application and issues a decision — either approving the DTC for a specified period or requesting additional information. The approval is not automatic, and some applications are initially denied and successfully appealed with more detailed medical information.
If the person with a disability doesn't have enough income to use the full DTC, the unused portion can be transferred to a spouse, common-law partner, parent, grandparent, child, grandchild, brother, sister, aunt, uncle, nephew, or niece who supports them. This makes the DTC valuable even for individuals with very low income — the credit flows through to the supporting family member's return.
The transfer is claimed on Schedule 2 (Amounts Transferred from Your Spouse or Common-Law Partner) or by completing the transfer section of the T2201 application to name the supporting individual.
The DTC is a gateway to several additional tax benefits and programs:
| Benefit / Program | Requires DTC Certification |
|---|---|
| Registered Disability Savings Plan (RDSP) | Yes — DTC eligibility required to open an RDSP |
| Canada Disability Benefit (CDB) | Yes — requires DTC certification |
| Child Disability Benefit (CDB supplement to CCB) | Yes — for children under 18 with DTC |
| Enhanced Child Care Expense Deduction | Yes — higher limit applies for DTC-eligible children |
| Attendant Care Deduction | Yes — can deduct attendant care costs if DTC-eligible |
The Disability Tax Credit can result in thousands of dollars in federal and provincial tax savings — both prospectively and retroactively. Swift Accounting helps Calgary individuals and families navigate the T2201 application, coordinate the DTC transfer, file retroactive T1 adjustments for prior years, and access related benefits like the RDSP. Book a free consultation if you believe you or a family member may qualify.