Disability Tax Credit 2024: Eligibility, Application, and Retroactive Claims

Key takeaways

• The Disability Tax Credit (DTC) is a non-refundable federal tax credit worth $9,428 in 2024 (federal credit of ~$1,415 at 15%)
• Eligibility requires a T2201 form completed by a medical practitioner and approved by the CRA
• A disability must be severe and prolonged (lasting or expected to last 12+ continuous months)
• Approved individuals can claim the credit; unused credits can be transferred to a supporting person
• The DTC unlocks other programs: RDSP eligibility, Child Disability Benefit, Disability Supplement

The Disability Tax Credit is the gateway to a range of federal and provincial disability-related benefits. Yet many Canadians who qualify never apply — either because they do not know about the credit or because they assume their condition does not qualify.

Who qualifies

To qualify for the DTC, you must have a severe and prolonged impairment in one or more basic activities of daily living (walking, speaking, hearing, feeding, dressing, mental functions necessary for daily life, eliminating) or life-sustaining therapy (insulin therapy, dialysis). "Severe" means the impairment restricts the activity more than 90% of the time. "Prolonged" means the condition has lasted or is expected to last at least 12 months.

The DTC expanded in recent years to include mental health conditions. Individuals with severe depression, anxiety, autism spectrum disorder, or other mental conditions affecting the ability to perform mental functions for daily life can qualify. Form T2201 has been updated to make these eligibility pathways clearer.

Claiming and transferring the credit

The DTC is claimed on Schedule 1 (Federal Tax) of the T1 return. If the approved individual's tax owing is less than the full credit amount, the unused portion can be transferred to a supporting individual — a parent, spouse, common-law partner, grandparent, child, grandchild, sibling, aunt, uncle, niece, or nephew. The supporting individual reduces their own federal tax payable by the transferred amount.

Registered Disability Savings Plan

DTC eligibility is a prerequisite to opening a Registered Disability Savings Plan (RDSP). The RDSP provides government matching grants (Canada Disability Savings Grant, up to $3,500 per year) and bonds for lower-income individuals (Canada Disability Savings Bond, up to $1,000 per year). An RDSP can accumulate up to $200,000 in lifetime contributions. If you or a family member qualifies for the DTC, open an RDSP as early as possible to maximize the grant and bond room.