It will now be easier for some Canadians to qualify for the disability tax credit

While the changes to the disability tax credit are a move in the right direction, more needs to be done to ensure vulnerable Canadians can access these critical supports. Photo by Alvero Moreno Perez

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It will now be easier for some Canadians to qualify for the disability tax credit (DTC) thanks to changes announced in last week’s Spring Economic Update by the federal government. The DTC is a non-refundable tax credit intended to recognize the impact of non-itemizable disability-related costs on one’s ability to pay tax. For 2026, the amount of the credit is $10,341, which provides a federal tax reduction of up to $1,448. Provincial and territorial credits are also available.

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Under the current rules, to be eligible for the DTC, an individual must have a severe and prolonged impairment in physical or mental functions. The effects of the impairment must be such that even with appropriate devices, medication and therapy the individual is markedly restricted in their ability to perform a basic activity of daily living, or would be so restricted were it not for extensive therapy to sustain a vital function.

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For these purposes, the Income Tax Act lists the following basic activities of daily living: walking; feeding or dressing oneself; mental functions necessary for everyday life; speaking; hearing; eliminating bodily waste and seeing.

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To qualify for the DTC, a qualified medical practitioner must certify on the T2201 Disability Tax Credit Certificate that the impairment is severe and prolonged and that its effects meet at least one of the impact criteria listed above. The Tax Act contains a list of medical practitioners recognized as qualified to certify impairments for the DTC.

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After taxpayers submit the T2201, the Canada Revenue Agency (CRA) reviews the information provided, including the information filled out by the qualified medical practitioner, and approves the DTC certificate if the individual meets all the legislative requirements. A valid DTC certificate not only allows you to claim the DTC itself but is also a requirement for accessing other federal disability benefits, including the relatively new Canada Disability Benefit, the registered disability savings plan (including the Canada Disability Savings Grants and Bonds), the Child Disability Benefit, and the disability supplement to the Canada Workers Benefit.

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Over the past few decades, the CRA’s experience in processing DTC applications has allowed for the identification of several long-lasting medical conditions that satisfy the disability criteria of the DTC. Last week’s economic update provided a list of more than 40 long-lasting medical conditions that will now be eligible for streamlined application. Under this new proposal, for individuals who have at least one of the listed medical conditions, a qualified medical practitioner would simply need to certify that the individual has the medical condition. The practitioner would no longer be required to certify that the individual’s impairment is severe and prolonged, and that its effects meet the legislated thresholds regarding daily living impacts.

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Among the conditions contained on the list are: Alzheimer’s disease, autism spectrum disorder (Level 3), cerebral palsy (severe), colostomy (permanent), cystic fibrosis, dementia, Huntington disease, profound hearing loss in one ear and severe hearing loss in the other ear, and schizophrenia.

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Under the new policy, if, for example, a medical practitioner certifies on the DTC application form that their patient has Alzheimer’s disease, they would no longer need to complete the part of the DTC form that asks for detailed information on the impacts of this medical condition for that patient (in other words, on their ability to perform mental functions necessary for everyday life).