Disability Deduction Canada

DEFINITION:Disability Deduction Canada: A tax deduction available to individuals with disabilities in Canada, aimed at reducing the tax burden and providing financial support for disability-related expenses.


1. Who is eligible for the Disability Deduction Canada?
– Individuals who have a severe and prolonged physical or mental impairment that restricts their ability to perform everyday activities or causes significant life-sustaining therapy are eligible for this deduction.

2. What expenses are eligible for the Disability Deduction Canada?
– Eligible expenses include costs related to medical services, therapy, attendant care, specialized equipment, home modifications, and other disability-related expenses necessary to manage the impairment.

3. How do I apply for the Disability Deduction Canada?
– To apply, you must complete Form T2201 – Disability Tax Credit Certificate and have it certified by a medical practitioner. The form needs to be submitted to the Canada Revenue Agency (CRA) for assessment.

4. What is the benefit of claiming the Disability Deduction Canada?
– Claiming the deduction can reduce your taxable income, resulting in a lower tax liability. It may also make you eligible for other tax credits and benefits, such as the Registered Disability Savings Plan (RDSP) and the Canada Caregiver Credit.

5. Can I claim the Disability Deduction Canada retroactively?
– Yes, you can claim this deduction retroactively for up to ten years, starting from the tax year in which you became eligible for the Disability Tax Credit.

6. Do I need to reapply for the Disability Deduction Canada every year?
– Once your eligibility for the Disability Tax Credit is approved, you don’t need to reapply annually. However, the CRA may review your eligibility periodically.

7. Can I transfer the Disability Deduction Canada to a family member?
– In certain situations, you may transfer the unused portion of your disability deduction to a supporting family member. This can be beneficial if you have little or no taxable income but have eligible expenses that can be claimed by a family member with higher income.