Disability tax credit changes will help the most vulnerable

What is the DTC?

The Disability Tax Credit (DTC) is a non-refundable tax credit that is transferrable to supporting individuals like a spouse, parent, or grandparent if the disabled person’s income is not high enough to absorb the tax benefits.

In 2026, the amount of the credit is $10,341—and that’s significant. In real dollar terms, this amounts to a federal tax reduction of up to $1,448. When you add the provincial portion of the tax reduction, which depends on your province of residence, the DTC has a real dollar value of about $1,800.  There is an additional supplement for disabled children that further increases the tax assistance. 

A valid DTC is also a “passport“ to other federal tax assistance, including the:

Related reading: A tax guide for Canadians with disabilities

How to Apply for the DTC

To apply for the DTC, you must file a T1 tax return together with the Form T2201, Disability Tax Credit Certificate. 

The disabled person must be blind, diagnosed with type 1 diabetes mellitus, or 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. These situations contribute to a “marked” restriction.

In a second definition, someone who is significantly restricted, the test is on whether the person can perform more than one basic activity of daily living, including seeing, and to what degree the cumulative effect of restrictions is comparable to being markedly restricted in a basic activity of daily living.

The basic activities of daily living are defined as walking, feeding, or dressing oneself; mental functions necessary for everyday life; speaking; hearing; seeing; and eliminating bodily waste.

What’s changing

The federal government is finally making it easier to apply for the Disability Tax Credit by reducing some of the red tape that has slowed approvals in the past.

More than 40 additional permanent medical conditions have now been identified as automatically meeting key eligibility criteria. These include Alzheimer’s disease, dementia, certain intellectual disabilities (such as an IQ of 70 or below), some forms of autism, traumatic brain injury, severely impaired cardiac function, and cystic fibrosis, among others.

If an individual is certified as having one of these listed conditions, a qualified medical practitioner or authorized professional will not need to provide as much detailed supporting information on the application form. This should significantly reduce delays in processing.

These changes will take effect starting in the 2026 tax year.

Adding more authorized people to the process

More professionals will now be allowed to complete Form T2201, which should help reduce pressure on physicians and speed up the DTC application process. In addition to medical doctors and nurses, occupational therapists, physiotherapists, and speech-language pathologists can now complete the form. Podiatrists will also be added starting in the 2027 tax year and beyond.

Public trustees who are authorized substitute decision-makers may also complete the form, as long as there is a valid certificate of incapacity. These individuals have legal authority to make decisions on behalf of someone who is unable to do so themselves.

Overall, these changes should make the process easier for tax filers and their caregivers, while also helping medical professionals and financial advisors play a more active role in ensuring eligible families access this tax benefit.

Missed it? Make a retroactive claim

In cases of progressive conditions, people often delay applying for the DTC. But if a family member living with cancer, Alzheimer’s disease, or another serious illness is now markedly or significantly limited in daily activities, it may be time to complete the application.