Child Disability Tax Credit: How Families Can Benefit

Caring for a child with a disability comes with unique challenges, including financial pressures. The Child Disability Tax Credit is a valuable resource that can help ease the financial burden for families. This blog will guide you through what the DTC is, how to apply, and additional benefits families can access.

What Is The Child Disability Tax Credit?

The Child Disability Tax Credit (DTC) is a non-refundable tax credit offered by the Government of Canada to support families of children with disabilities. It aims to offset extra costs associated with disabilities, providing relief through reduced tax payments.

Key Benefits Include:

• Tax savings: Families can claim up to a specific amount annually, helping to lower their overall tax burden.
• Registered Disability Savings Plan (RDSP) eligibility: Once approved for the DTC, families can open an RDSP for long-term financial planning.
• Backdating: If eligible in prior years, families may receive retroactive benefits.

To qualify, the child must have a severe and prolonged impairment certified by a medical practitioner.

•  

How to Apply Fot The Child Disability Tax Credit

The application process may seem daunting, but understanding the steps makes it manageable:

1. Obtain Form T2201

• Download the Disability Tax Credit Certificate (Form T2201) from the Canada Revenue Agency (CRA) website.

2. Complete the Form

• The first section is filled out by the applicant (parent or guardian).
• A qualified medical practitioner must complete the second section, certifying the child’s disability.

3. Submit the Application

• Send the completed form to the CRA for review.
• The review process typically takes 8–12 weeks.

Pro Tips for Approval:

• Provide detailed, accurate information about how the disability affects the child’s daily life.
• Ensure the medical professional explains how the condition meets the CRA’s eligibility criteria.

Additional Family Benefits

Beyond the Child Disability Tax Credit, families may qualify for other credits and support programs:

1. Canada Child Benefit (CCB) Disability Supplement

• Families eligible for the DTC may receive additional funds through the CCB Disability Supplement, a monthly payment that helps cover daily living expenses.

2. Medical Expense Tax Credit

• Parents can claim medical expenses not covered by insurance, such as therapies, travel for treatments, and specialized equipment.

3. Registered Disability Savings Plan (RDSP)

• Once DTC-approved, families can open an RDSP, where the government provides matching contributions and bonds to encourage savings.

4. Provincial and Territorial Benefits

• Some provinces and territories offer complementary programs or tax credits for families of children with disabilities. Check your local government’s website for details.

How Families Can Maximize the Child Disability Tax Credit

To make the most of this credit:

• Stay organized with documentation, including receipts for medical expenses.
• Reapply if the child’s condition improves or worsens, as eligibility requirements may change.
• Consult a tax professional or disability advocate for assistance with the application process.

The Child Disability Tax Credit is more than just a tax benefit—it’s a vital lifeline for families managing the complexities of raising a child with a disability. By understanding the application process and exploring additional support options, families can maximize the financial assistance available and focus on what matters most: their child’s well-being.

Swift Disability Services have been helping Canadians through the difficult Disability Tax Credit application process for more than 4 years. The average Swift client receives more than $10,000 in refunds from the Canada Revenue Agency from overpaying taxes in previous years. 

Swift can get you approved and paid in less than 90 days. Begin your partnership with Swift Disability Services today and get paid up to $45,000 from the CRA. We’ll do the work, just give us a call!

Start Now