Ketty
Big news for Canadians in 2025 — the Canada Revenue Agency (CRA) has officially confirmed that the Disability Tax Credit (DTC) is now worth up to $8,986.
This enhanced non-refundable tax credit is designed to ease the financial burden on individuals living with severe, long-term disabilities, or their supporting family members.
With rising healthcare costs, this credit offers essential financial relief and opens the door to additional government support programs.
In this article, we’ll break down the updated eligibility requirements, refund amounts, and how to apply for the DTC in 2025.
What Is the Disability Tax Credit (DTC)?
The Disability Tax Credit is a non-refundable tax credit designed to reduce the income tax burden for individuals with severe and prolonged physical or mental impairments.
If the individual with the disability has no or limited taxable income, a supporting family member may be able to claim the credit on their behalf.
This credit aims to improve financial equity for Canadians with disabilities by helping them manage added daily living expenses due to their condition.
2025 Disability Tax Credit Eligibility Criteria
To qualify for the DTC in 2025, applicants must meet strict eligibility guidelines set by the CRA. These are based on the nature and duration of the impairment and its impact on daily life.
| Requirement | Details |
|---|---|
| Medical Certification | A licensed medical practitioner must certify the condition on Form T2201 |
| Duration | Must last, or be expected to last, at least 12 months |
| Daily Function Impact | Must significantly restrict one or more basic daily activities |
| CRA Approval | CRA must approve the Disability Tax Credit Certificate |
| Age & Residency | No age limit, but must be a Canadian resident |
Examples of eligible impairments include:
- Mobility limitations (e.g., difficulty walking, dressing)
- Vision or hearing impairments
- Mental health disorders
- Developmental disabilities
- Chronic medical conditions (e.g., diabetes requiring therapy)
Refund Amount: How Much Can You Get?
The CRA calculates the refund based on federal and provincial components of the DTC. While the DTC is non-refundable, the tax savings and potential retroactive payments can add up to thousands of dollars.
| Component | Federal Amount | Provincial Average | Total Potential Refund |
|---|---|---|---|
| Base Disability Tax Credit | $9,428 | $5,135 | $14,563 |
| Refundable Amount (Est.) | – | – | Up to $8,986 |
Final refund depends on your tax situation, province, and whether the claim is for yourself or a dependent.
How to Apply for the DTC in 2025
Applying for the Disability Tax Credit is a multi-step process, but it can lead to substantial financial benefits:
- Download Form T2201
Get the DTC Certificate form from the CRA website. - Get Medical Certification
Have your healthcare provider (doctor, nurse practitioner, psychologist, etc.) complete and sign the form. - Submit the Form
You can either upload the form via your CRA My Account or mail it to the designated CRA office. - Wait for CRA Approval
CRA will issue a Notice of Determination if your claim is approved.
Once approved, the credit applies to current and up to 10 previous tax years, potentially resulting in significant retroactive refunds.
Key Benefits of the DTC
The Disability Tax Credit does more than reduce your taxes—it also opens doors to other valuable programs:
- Registered Disability Savings Plan (RDSP) eligibility
- Canada Workers Benefit – Disability Supplement
- Provincial disability support programs
- Medical expense deductions and travel support
- Retroactive refunds up to 10 years
These benefits provide vital assistance with daily care costs, home modifications, and long-term financial planning.
Why the DTC Matters in 2025
As inflation continues to impact healthcare, medication, and caregiving services, the DTC is more crucial than ever. For eligible Canadians, this credit provides:
- Tax relief and savings
- Access to other federal and provincial benefits
- Support for caregivers and families
- Increased financial independence and security
Even if the disabled individual has little income, a parent, spouse, or guardian can claim the credit, making it an essential tool for families managing care costs.
The CRA’s confirmation of the $8,986 Disability Tax Credit for 2025 marks a major boost for Canadians living with long-term impairments.
Whether you’re applying for the first time or considering retroactive claims, this credit can significantly reduce your tax burden and unlock other financial support.
If you or someone you care for is living with a disability, take the time to check eligibility, consult a medical professional, and submit Form T2201.
The process is well worth it — especially with the potential for retroactive refunds going back a decade.
FAQs
Can I claim the DTC for a family member?
Yes, if your dependent has little or no income, you may claim the DTC on their behalf and receive the refund.
Is the Disability Tax Credit refundable?
The DTC is a non-refundable tax credit, but it can still result in significant tax savings and retroactive refunds.
What if my application is denied?
You can appeal the decision or submit additional medical information to support your case with CRA.