It Will Now Be Easier For Some Canadians To Qualify For The Disability Tax Credit

It will now be easier for some Canadians to qualify for the disability tax credit (DTC) thanks to changes announced in last week’s Spring Economic Update by the federal government. The DTC is a non-refundable tax credit intended to recognize the impact of non-itemizable disability-related costs on one’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. Provincial and territorial credits are also available.

Under the current rules, 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 the individual is markedly restricted in their ability to perform a basic activity of daily living, or would be so restricted were it not for extensive therapy to sustain a vital function.

For these purposes, the Income Tax Ac t 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.

To qualify for the DTC, a qualified medical practitioner must certify on the T2201 Disability Tax Credit Certificate that the impairment is severe and prolonged and that its effects meet at least one of the impact criteria listed above. The Tax Act contains a list of medical practitioners recognized as qualified to certify impairments for the DTC.

After taxpayers submit the T2201, the Canada Revenue Agency (CRA) reviews the information provided, including the information filled out by the qualified medical practitioner, and approves 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 relatively new Canada Disability Benefit , the registered disability savings plan (including the Canada Disability Savings Grants and Bonds), the Child Disability Benefit, and the disability supplement to the Canada Workers Benefit.

Over the past few decades, the CRA’s experience in processing DTC applications has allowed for the identification of several long-lasting medical conditions that satisfy the disability criteria of the DTC. Last week’s economic update provided a list of more than 40 long-lasting medical conditions that will now be eligible for streamlined application. Under this new proposal, for individuals who have at least one of the listed medical conditions, a qualified medical practitioner would simply need to certify that the individual has the medical condition. The practitioner would no longer be required to certify that the individual’s impairment is severe and prolonged, and that its effects meet the legislated thresholds regarding daily living impacts.

Among the conditions contained on the list are: Alzheimer’s disease, autism spectrum disorder (Level 3), cerebral palsy (severe), colostomy (permanent), cystic fibrosis, dementia, Huntington disease, profound hearing loss in one ear and severe hearing loss in the other ear, and schizophrenia.

Under the new policy, if, for example, a medical practitioner certifies on the DTC application form that their patient has Alzheimer’s disease, they would no longer need to complete the part of the DTC form that asks for detailed information on the impacts of this medical condition for that patient (in other words, on their ability to perform mental functions necessary for everyday life).

This new policy doesn’t change the disability criteria to qualify for the DTC, and the CRA still has the authority to ask for additional information to verify that these criteria are met. This would include the requirement for the individual to have a severe and prolonged impairment in physical or mental functions, and for the impacts of the impairment to meet at least one of the relevant legislated thresholds regarding the impact on daily living.

As is currently the case for all individuals who qualify for the DTC, individuals with a long-lasting medical condition still need to inform the CRA in writing if there is an improvement in their medical condition that could impact their eligibility for the DTC. For any medical conditions not mentioned in the list but that meet the requirements to qualify for the DTC, a medical practitioner would continue to be able to certify DTC eligibility as before. This new measure applies to DTC certifications issued for the 2026 and future taxation years .

The economic update also proposed to expand the types of impairments that may be certified by certain qualified medical practitioners for the purposes of the DTC, starting in 2027. Specifically, the government will soon permit an occupational therapist to certify impairments affecting eliminating (bowel or bladder functions). A physiotherapist will be permitted to certify impairments affecting feeding or dressing, as well as cumulative effects of multiple restrictions pertaining to walking, feeding or dressing. A speech-language pathologist will be permitted to certify impairments affecting feeding or hearing.

The government also proposed to add podiatrists to the list of medical practitioners who may certify impairments for the DTC. An individual who holds a license to practice as a podiatrist in a province will be permitted to certify impairments affecting walking that are within their scope of practice to assess.

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While these changes to the DTC are a step in the right direction, more needs to be done to ensure vulnerable Canadians can access these critical supports, said CPA Canada’s director of social impact and financial literacy leader, Li Zhang in a news release.

“The (DTC) has long been the single largest barrier to federal benefit access for Canadians with disabilities , and many who qualify still don’t receive them,” she said. “Further review of the DTC certificate is needed,” she added. “Right now, the most severe forms of disability are covered, but there is a strong case to expand eligibility based on real financial and workforce challenges.”

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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