Disability Tax Credit
The disability tax credit (DTC) is a non-refundable tax credit that helps persons with disabilities or their supporting persons reduce the amount of income tax they may have to pay.
What is the Disability Tax Credit?
The disability tax credit (DTC) is a non-refundable tax credit that helps persons with disabilities or their supporting persons reduce the amount of income tax they may have to pay. An individual may claim the disability amount once they are eligible for the DTC. This amount includes a supplement for persons under 18 years of age at the end of the year.
The purpose of the DTC is to provide for greater tax equity by allowing some relief for disability costs, since these are unavoidable additional expenses that other taxpayers don’t have to face.
Being eligible for the DTC can open the door to other federal, provincial, or territorial programs such as the registered disability savings plan, the Canada workers benefit, and the child disability benefit.
Who is Eligible for the DTC?
Parents of children with T1D, spouses or common-law partners of people living with T1D, and individuals over the age of 18 with T1D can apply.
To qualify for the DTC a medical practitioner (endocrinologist, family doctor or nurse) must complete Form T2201, Disability Tax Credit Certificate certifying that you have insulin-dependent type 1 diabetes and that you meet the eligibility criteria.
Eligibility Criteria for DTC
There are different ways for which a person can be eligible for the disability tax credit (DTC). In the case of type 1 diabetes, we are chiefly concerned with “life sustaining therapy”, defined as any therapy necessary to sustain life.
To qualify, a person with T1D must meet both of the following criteria:
- The therapy is needed to support a vital function, even if it eases the symptoms.
- The therapy is needed at least 3 times per week, for an average of at least 14 hours a week.
The 14-hour rule
Qualification for DTC is not automatic for persons with T1D. To qualify, you must spend at least 14 hours per week engaged in the following eligible activities:
- checking blood glucose levels;
- preparing and administering the insulin;
- calibrating necessary equipment;
- testing ketones;
- keeping a logbook of blood glucose levels;
Activities not included:
- The time that a device (such as an insulin pump) takes to deliver therapy;
- Counting carbohydrates;
- Travel time to receive therapy;
- Going to medical appointments;
- Buying medication;
- Recuperation after therapy;
If a child cannot do the activities related to the therapy because of their age, the time spent by the child’s primary caregivers to do and supervise these activities can be counted in the 14 hours per week requirement.
We recommend you provide your health care practitioner with a written account of the time spent over a two-week period on eligible activities.
The Disability Advisory Committee (DAC) in its First Annual Report recommended that all Canadians requiring life-sustaining therapy, including insulin therapy, should automatically qualify for the Disability Tax Credit (DTC). JDRF supports this recommendation which is included in our 2020 and 2021 pre-budget recommendations.
Update as of April 21, 2021:
JDRF Canada is pleased that the recently announced federal budget has made much-needed changes to the eligibility criteria for the Disability Tax Credit (DTC), which has been an ongoing advocacy issue of ours. Budget 2021 will make key activities – activities that are part of life with T1D – such as exercise, carbohydrate counting, medical appointments and time spent recovering from high or low blood sugars eligible to be counted against the 14 hours per week requirement.
These positive changes will help make the DTC more accessible to Canadians living with T1D.
More information can be found on the Government of Canada website.