Cra Denies Disability Credit To 'housebound' Taxpayer With Chemical Sensitivities

For Canadians living with a disability, the disability tax credit (DTC) can provide some tax relief, and is intended to help recognize the impact of non-itemizable disability-related costs on someone’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. Corresponding provincial and territorial credits are also available.

Historically, 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, individuals are markedly restricted in their ability to perform a basic activity of daily living, or would be so restricted were it not for “life-sustaining therapy” to support a vital function.

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.

For 2026 and subsequent years, an individual can now qualify for the DTC if they have at least one of more than 40 long-lasting medical conditions , provided a qualified medical practitioner certifies that the individual has the medical condition. In other words, the practitioner is no longer required to certify that the individual’s impairment is severe and prolonged, and that its effects meet the legislated thresholds regarding daily living impacts.

To apply for the DTC, you’ll need a completed form T2201 , Disability Tax Credit Certificate, certified by a qualified medical practitioner. After submitting the T2201, the Canada Revenue Agency (CRA) will review the information provided, including the information filled out by the qualified medical practitioner, and will approve 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 Canada Disability Benefit , the registered disability savings plan , the Child Disability Benefit, and the disability supplement to the Canada Workers Benefit.

If the CRA denies your DTC claim, you can take your claim to Tax Court , which is what one Ontario taxpayer did in a case heard in early July. The taxpayer suffers from multiple chemical sensitivity (MCS), and attempted to claim the DTC for the 2024 taxation year , which was denied by the CRA. This was not the first time the taxpayer was in Tax Court, as she was also denied the DTC for her MCS for the 2022 tax year.

The taxpayer, a high school history teacher, was diagnosed with MCS a number of years ago and has a high degree of sensitivity to many triggers, including hand sanitizers, perfumes and colognes, deodorant, cosmetics, chemicals relating to dry cleaning, laundry products, sunscreen and many other commonly used products. Should the taxpayer be exposed to a product or chemical that triggers her MCS, she may experience a range of reactions, depending on factors such as the nature of the chemical and its intensity, as well as the accumulation of chemicals over the day and the nature of the air on a particular day.

One potential reaction is anaphylactic, which can prevent her from breathing, speaking or walking and can resolve after she can reach a space that is clear of any triggers or requires a treatment such as an epinephrine injection. One example cited in the case by the taxpayer was exposure to spray-on deodorant used by a student in her classroom, whereby the taxpayer was forced to run to the football field to escape the trigger, perhaps using an EpiPen to allow her to breathe just enough to reach the field.

During the 2024 tax year, the taxpayer did not teach in person but rather taught an on-line course that summer, did some marking for an adult education course and also did some on-line tutoring. She described herself as being “housebound,” as indoor public spaces such as stores, public transit and hospitals are dangerous to her. She is currently in the process of moving to a more rural area to enable her to spend more time outside.

In court she testified that there are no treatments or therapies that help her MCS and that the only effective means to address the risk of anaphylaxis is the avoidance of triggers. She testified that she runs multiple air purifiers in her house 85 per cent of the time, but emphasized that their use does not prevent the onset of anaphylaxis in her home and also does not mean she is able to enter indoor public spaces freely. Rather, they allow her to live more comfortably in her home, particularly as other members of her family do enter indoor public spaces and can, effectively, carry chemicals into the home.

She also used a sauna multiple times per week, which she finds physically beneficial, but it does not mitigate her reactions to chemical triggers. There was no evidence as to the total amount of time per week that the taxpayer used the sauna.

The taxpayer submitted the T2201 form for 2024, in which her doctor noted that the taxpayer’s MCS was a severe, life-threatening condition, and that she used a sauna and air purifiers as “life-sustaining therapy,” which is one of the criteria to claim the DTC.

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While the judge was sympathetic to the taxpayer’s condition, she noted that the taxpayer “makes enormous efforts to avoid triggering her MCS, and is sufficiently successful that she is largely able to perform basic activities of daily living.” As such, she could not conclude that the taxpayer’s ability to perform a basic activity of daily living were markedly restricted “all or substantially all of the time,” which is a requirement under the Act.

The judge then considered whether the air purifiers, the sauna or the fact that the taxpayer generally stayed in her house to avoid MCS triggers, could be considered to be life-sustaining therapy. To qualify, a taxpayer must take time away from their normal everyday activities to receive the therapy. The judge concluded that the use of air purifiers and the sauna simply don’t qualify under this criteria.

As a result, the judge found that the taxpayer was, once again, not eligible for the DTC.

Jamie Golombek, FCPA, FCA, CFP, CLU, TEP, is the managing director, Tax & Estate Planning with CIBC Private Wealth in Toronto. Jamie.Golombek@cibc.com .

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