Most Frequently Asked Questions regarding the Disability Tax Credit.

Disability Tax Credit Basics

Its that time of year again…tax time! Here in Canada, it is also the time that many people living with diabetes learn that they could be eligible for the Disability Tax Credit (DTC). Here are a few frequently asked questions about the Disability Tax Credit that will hopefully help you as you decide if you or your loved one qualifies…

Does everyone with diabetes qualify?

No.  In order to qualify for the DTC you must use multiple daily injections of insulin via syringe or insulin pump and be intensively managing your diabetes care.

What does intensively managing your diabetes care mean?

You must be testing, injecting, logging, and adjusting your insulin doses.  These tasks must take you over 14 hours per week to perform.

Do children with diabetes qualify for the Disability Tax Credit?

Yes, children under 18 qualify without having to prove the 14 hours.  CRA assumes that the amount spent on diabetes care by both the parent and child would combine to be over 14 hours per week and therefore a diagnosis signed by the doctor on the T2201 is all that is required for their approval.

What is the Disabled Child Benefit?

This is a separate amount that can be given to you for your child if your child is eligible for the DTC and you are receiving a Child Tax Benefit.

What is a T2201?

This is the form created by CRA that must be filled out by the person with diabetes and their doctor in order to qualify for the disability tax credit.

I am not disabled! I don’t want to be labeled disabled. Why do I want to fill out this credit?

The DTC, when applied to people with diabetes,  is not about being disabled.  A person with diabetes does not qualify based on a disability. They qualify based on the clause for people who require “Life-sustaining therapy”.  This subsection is for people who spend an inordinate amount of time on the therapy that they require to live.

I have read that I can’t use the amount of time that I spend counting carbohydrates. Why not?

CRA feels that over time things like counting carbs become second nature to a person with diabetes and therefore no longer takes an inordinate amount of their time.

I have to exercise because of my diabetes.  Can I count the time I spend at that the gym?

No. Everyone should be exercising and while there is added benefits for a person with diabetes, this is not an activity that will be allowed on your application.

What tasks can I include in my application?

The Diabetes Advocacy website includes a comprehensive list of what sort of tasks are allowed and a guide of how much time it takes to perform them each day, as well as more questions answered about the Disability Tax Credit.

Do I need to send Canada Revenue Agency my log book?

There is no need. CRA simply wants to see the tasks that you do each week with a specific breakdown of how much time those tasks take.  You doctor however may ask that you keep track of what you are doing for a period of time and bring it to him/her before they will sign off on the T2201 for you.

Find out how much time you spend on diabetes-related tasks with the help of our 7 day workbook.

Who can sign the T2201?

A medical doctor must sign this form.  This can be your family doctor, pediatrician, internist or endocrinologist.  Choose the person with the most knowledge of your care and understanding of what they are signing.  Their support is vital to a successful application.

Do I need to pay someone to fill out the T2201?

No.  There is no reason to pay a fee or a percentage of your return to have this credit filled for you.  Diabetes Advocacy does offer a service to assist in filling the forms for those who are not comfortable in doing this themselves.  I also have created a booklet that guides you step by step on how to fill the forms.

Can I only apply when I file my taxes?

No, you don’t have to wait until you file your tax return to make a DTC application. You can fill out the T2201 at any time and ask for the Canadian Revenue to reassess your taxes for years back to your diagnosis or 10 years, whichever is first.

Take our short DTC quiz to see if you might qualify.

Do you have more questions about the Disability Tax Credit? Check out the disability tax credit page or email us for more answers.

Disability Tax Credit Change Happy Dance!

Disability Tax Credit change happy dance

Yesterday I did something I haven’t had to do in close to ten years…I filled out my son’s Disability Tax Credit form.

For those who are not in Canada, and those in Canada who just don’t know, the Disability Tax Credit(DTC) is a credit that people with diabetes who are insulin dependent can use on their taxes to reduce their taxable income. People who receive the DTC are also eligible for the Registered Disability Savings Plan and children, like my son, who receive the credit may receive a Disabled Child Benefit through the Child Tax Credit.

See if you might qualify for the DTC with our free quiz

The Disability Tax Credit (DTC), for people with diabetes, is not given because the government views diabetes as a disability.  It is given because people who are insulin dependent require insulin to live–they require Life-Sustaining Therapy. Life-sustaining therapy is a subcategory of the DTC.

Years ago, I embarked on a lengthy journey to see this tax credit be given to people with diabetes.  At that time some people got it, some didn’t.  It simply seemed to depend on your stamina and the whim of the Canada Revenue Agency agent processing your application.  You can read my real-time frustrations here but to make a long story short, after a lengthy time frame, the legislation was amended and people with diabetes were given more fair and equal treatment.

While some friends were given the credit for a lifetime, my son wasn’t. I
knew it was personal.

I wasn’t paranoid honest! I would go to events and see the CRA booth set up. As I walked by and they saw my name, they would instantly recognize me.  I was sure that having agents of the Canadian Revenue Agency recognize your name was not a good thing!

Visions of audits and extended periods of time spent on my returns haunted my nights. With this in mind, imagine my anxiety at having to complete a new application for my son?

I had been advised that my son’s Disability Tax Credit status would change on January 1, 2013 unless my credit was submitted earlier.  We had a diabetes clinic appointment the next week and the doctor had told me to bring along the form for her to sign.  I was still nervous.

Would they still recognize the name? My last name had changed. I have gone back to my maiden name.  Would they still make a connection with my son and his last name? Would I have to fight to prove that yes, we really and honestly do intensively manage his diabetes care?

We really do use up well over 14 hours per week in diabetes-related junk. I had won this battle once.  Thousands have since had their applications approved.

The tax agency couldn’t hold a grudge forever could they? My mind was cynical but confident. Others get the credit. I help others, including adults, get the credit.  My application would not be denied!

I then received an email from a friend.  “FYI…in case you didn’t know…” and she proceeded to send me a copy of a memo that noted CRA had made changes to the disability tax credit guidelines.  All children under the age of 18 who have diabetes and have applied for the Disability Tax Credit would now be approved without further question.

Happy dancin!! Happy dancin!!! This was AWESOME!

Disability Tax Credit 101

Disability Tax Credit Basics Its that time of the year again.  The time when the tax man comes to call and we scurry to find any way to hang onto our hard earned dollars that we can. This is also the time of year when I find myself inundated with many questions regarding the Disability Tax Credit (DTC).

I am not an accountant. I am not a lawyer. I am a mother who has been dealing with this issue since the beginning of time (or at least early 2000).  Back then, the DTC was given to some people with diabetes and denied to others. Eventually, it was given to those using insulin pumps but not those on injections. Finally after a long battle, a lot of letters and presentations, this ruling was changed and the discrimination faced by people living with diabetes was removed. (only to resurface in 2018)

The Disability Tax Credit (DTC) is given to people who are unable to perform the “basic acts of daily living” OR who require life-sustaining therapy. While the argument has been made that people with diabetes are not able to perform the basic acts of daily living, the real case has been made that they require life-sustaining therapy.  If they do not take insulin they die. It’s very simple.

So what is the tax credit and why do you want it? Well, it gets you money back on your taxes! Again, I am not an accountant but I think of it as my own extra RRSP or spouse to deduct off of my taxable income.  If you pay in any income tax, you will see a bit more money coming back to you.

If you have no income or very little income, this credit may still be important for you. It may reduce your income to the point that you now qualify for the GST. If you have a child with diabetes, it will mean that he/she now qualifies for a disabled child benefit which adds approximately another $100 to your monthly CTB.

There are still many questions from people who are not sure if they qualify. You can try this short quiz to help you decide. I will also attempt to answer a few questions that come up…

But I’m don’t want to be labeled Disabled.

The Disability Tax Credit? I am not disabled! I don’t want my child labeled this way either.  You are not claiming that you or your loved one is “disabled”.  By applying for this credit, you are stating that you or your loved one requires “life-sustaining therapy” to stay alive. As I have said, no insulin equals no life.

Do children automatically qualify?

Children under 18 years of age who have been diagnosed with type 1 diabetes do qualify for the tax credit.  It is that simple. The time spent on care by the child and parent is felt to easily total over 14 hours. A signature from your doctor regarding diagnosis will entitle you to the credit.  While reducing your taxable income, this credit will also entitle you to the Disabled Child Tax Benefit as well as the CTB you may already be receiving.

My son is now an adult. Does he still qualify?

Yes, he does.  If he has any developmental issues, this definitely means he qualifies and it should be noted on the T2201.  If he does not have developmental issues, but he still tests regularly, injects or boluses, and intensively manages his diabetes care, then he still requires life-sustaining therapy and meets the time requirements.

I have Type 2 Diabetes. Do I qualify?

This one is a little trickier.  If you are no longer producing any insulin and must take insulin injections multiple times per day or use an insulin pump, then you may qualify for the DTC. If your diabetes is still managed through diet, exercise or pills, you will not qualify. Again, you can go through our quiz to see if you may qualify. 

I don’t know what type of diabetes I have but I take needles. Do I qualify?

Again, as long as you are using multiple daily injections, logging, and testing, you most likely will qualify for the DTC.

Is it true you can’t count recovery time?

I was told that you can’t count recovery from lows.  That is right. You can’t but CRA does recognize that you can make errors in your care.  I have a lengthy list of how time is calculated in accordance with CRA guidelines. If you feel that you do these things, then you should easily qualify for the DTC.

Please remember that your doctor must be very aware of what qualifies as therapy and how you manage your time.  Your doctor now is your key to approval. If he or she understands the time you invest in keeping yourself healthy and tells CRA that, then you will get your tax credit.

To help your doctor understand how much time you spend on your care, you can share with him/her activities logged in the DTC workbook

Why do I care about getting the DTC?

Again, this is a credit that gets you money back on your taxes! I am not an accountant but I have come to think of it as my own extra RRSP or spouse to deduct.  This is an amount that comes off of your taxable income before anything else.  If you pay in any income tax, you will see more money coming back to you.

Even if you have no income or very little income, this credit can still be important for you. It may reduce your income to the point that you now qualify for the GST.  If you have a child with diabetes, remember that it will mean that he/she now qualifies for a disabled child benefit which adds approximately another $100 to your monthly CTB.

Do I have to reapply?

It depends on the person processing your file. Yes, it is that arbitrary.  I have heard of families with two people diagnosed with Type 1 diabetes who both applied for the DTC and both were given two different times to reapply.  You could be approved for two years, five years or even for a lifetime.  

Remember the Disability Tax Credit is a tax credit that you receive because you put so much work into keeping yourself of your loved one alive. Life-sustaining therapy is a real part of diabetes.  Injecting, bolusing, testing, calculating is all part and parcel of what keeps us or our loved ones alive. These are not tasks that someone without diabetes has to perform.

If you have any further questions ask your diabetes team, your accountant or contact me and I will do what I can to point you in the right direction.