The Disability Tax Credit (DTC) is a non-refundable tax credit that reduces the federal income tax owed by eligible Canadians with significant disabilities — or by a family member supporting them. It’s one of the most valuable financial tools available to families of children with special needs, and studies suggest that a significant percentage of eligible families are not claiming it.
What Is the DTC Worth?
For 2026, the federal DTC is approximately $9,428 in disability amount for an adult, or $14,910 for a child under 18 (which includes the Supplement for Children with Disabilities). At the federal tax rate of 15%, this translates to approximately $1,414 to $2,237 in actual tax savings annually.
Ontario also has a corresponding provincial disability tax credit (about $8,790), which provides additional savings.
These are credits — they reduce tax owed, not income. If your tax owing is less than the credit amount, the unused portion can be transferred to a supporting family member.
Eligibility: The Functional Standard
The DTC applies to people who have a severe and prolonged impairment in one or more basic activities of daily living:
- Vision
- Speaking
- Hearing
- Walking
- Eliminating (bowel/bladder functions)
- Feeding
- Dressing
- Mental functions necessary for everyday life
The “mental functions” category is particularly relevant for families of children with autism, ADHD, learning disabilities, and intellectual disabilities. The key criteria: the impairment takes excessive time (even with therapy, medication, or devices), or is present at least 90% of the time.
How to Apply
- Download Form T2201 (Disability Tax Credit Certificate) from canada.ca
- Have your child’s medical practitioner (physician, psychologist, nurse practitioner, etc.) complete Part B, certifying the nature and severity of the impairment
- Complete Part A (your information) and submit to CRA — by mail or through My Account online
- CRA processes the application and sends a determination letter
Tip: Be thorough and specific in the medical section. CRA looks for evidence that the impairment meets the “all or substantially all” and “takes an excessive amount of time” thresholds. Vague descriptions result in denials. Your child’s specialist is often better positioned than a GP to complete this form.
Related Benefits Unlocked by DTC Approval
- Registered Disability Savings Plan (RDSP): A long-term savings plan with government matching grants and bonds. Up to $70,000 in grants over a lifetime. DTC approval is required to open one.
- Child Disability Benefit (CDB): Added to the Canada Child Benefit for DTC-eligible children. Can be $300+/month.
- Working Income Tax Benefit (Disability Supplement): Additional supplement for working DTC holders
If your application is denied, you can request an objection — many initial denials are reversed on appeal when additional medical documentation is provided.
