How Does The Disability Tax Credit Work?

how does disability tax credit work dtc canada application criteria

The society is composed of all sorts of people. In our daily life, occasionally, we encounter people who are physically disabled. These people have not been granted all the physical abilities that an average person is blessed with. However, this does not stop them from being an active member of our society, and thus they must be given equal rights and duties as any other citizen of Canada. 

What Is The Disability Tax Credit? 

To provide some relief to the disabled community, Canada's government offers a sort of tax relief to help the persons who have any physical disability. This tax is known as DTC or disability tax credit. It is a tax credit that is non-refundable. However, you must be eligible according to the law of the country to claim this amount. 

One might question the need or sole existence of this tax credit. The answer is straightforward. Unfortunately, the people that have a disability face an extra cost of a few hundred dollars each month due to the impairment they possess. The other citizens that pay the amount of tax each month do not go through any of such extra expenditures. 

Eligibility Criteria For The Disability Tax Credit 

Once you are eligible for the DTC, you can access some other programs held at the provincial or local level. These programs might be for disability tax credit application

● Child disability benefit. 
● Working income tax benefit. 

The given list shows the people that must fulfill at least one of the following criteria: 

● The person is blind. 

● The person is significantly restricted in performing at least one of the most common and fundamental activities of everyday life. 

● The person is markedly limited in two or more than two of the primary events of daily life (this might include a vision impairment or walking disability) 

● The person is in dire need of a therapy that is life maintaining. 

Moreover, the person's disability must fulfill both of the criteria for the disability tax credit form

● It must be prolonged. It means that the impairment has lasted for an extended period. Also, it is expected to continue consecutively for a tenure of a minimum of 12 months. 

● It must be present all the time; if not, it must be present most of the time (in no cases, 90% of the time). 

● A brief detail of the eligibility mentioned above criteria is explained below: 

● Vision 

● Greatly restricted 

● The combined effect of significant restrictions 

● Life-maintaining therapy 

1. Vision 

A person is labeled as blind if, even after using the aiding glasses, contact lenses, or medication, he or she cannot see. The vision of such a person must meet any of the given criteria: 

● Using the Snellen Chart if the visual acuity in both eyes is 20/200 (6/60) or less, 

● The greatest diameter of the field of vision in both eyes is 20 degrees or less. 

2. Greatly Restricted 

A person is markedly restricted if they are unable or takes an excessive amount of time to do one or more of the necessary activities of daily living, even with therapy and appropriate devices and medication. This restriction must be present all or substantially (at least 90% of the time). 

Fundamental Activities Of Daily Living 

The first actions that we do in our everyday life are as follows: 

● Hearing. 
● Speaking. 
● Feeding. 
● Brain functions essential for daily living. 
● Walking. 
● Eliminating (bowel function). 

3. Significant Restrictions And Their Combined Effect 

To be eligible for the DTC under combined effect, the person who is eligible for the daily tax credit must have following given characteristics: 

● The person cannot perform two of the essential daily life activities, such as hearing and speaking. 

● These restrictions, more correctly known as significant restrictions, coexist together for 85-90 percent of the time. 

● When these considerable restrictions are joined or added together, they ultimately fall under the markedly restricted criteria. 

The Meaning Of "Significantly Restricted." 

It merely means that the concerned person does not fall into the category of greatly restricted. It means that hearing or speaking or seeing or any other ability to perform a fundamental activity of everyday life is markedly restricted to a great deal. The person might be unable to complete the action for a significant portion of time, probably 90% of the time. 

For Example 

Justin can walk 200 meters, but then he has to take time to retrieve it. He can perform all sorts of mental functions and activities without facing any difficulty. However, he is only able to concentrate on a subject for a very brief amount of time. 

When these two effects are combined, they form significant restrictions, and that becomes equal to being greatly restricted, as a person faces hindrance in performing everyday life activities. 

4. Life-Maintaining Therapy 

The person has to meet the given criteria: 

● This therapy is required to reinforce an essential function, even after the indications and symptoms are eased. 

● The treatment is demanded at least three times a week. Or it can be a minimum of 14 hours per week. 

What Counts In The 14-Hour Requirement? 

The therapy must need your time and dedication. To get the treatment, you are bound to leave your everyday life activities behind and get the treatment no matter what, to sustain your living standard. The device to get the therapy is a portable one, and it takes time to be set up to provide you the treatment. For instance, you need a dialyzer to get your kidneys filtered. 

If a patient is unable to perform the activities related to his therapy due to age factor or if the patient is very sick, then the time spent by the patient's primary caretakers to do and look after these activities can be included in the 14 hours per week need. 

Disability is not easy to live with, but with some paperwork, it might get a little easier. Tohme Accounting will carry your Disability tax credit work to get you the finest deals you can get. We are always here to put the time and effort, to help you manage your paperwork, and get you the finest result.

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