The Disability Tax Credit (DTC) is a non-refundable tax credit that helps people with disabilities and/or their caregivers pay less income tax. If someone has a serious long-term physical or mental health condition, they can apply for this credit and, if approved, use it to lower income taxes for themselves or their caregiver(s). The general idea is to reduce some of the cost related to the impairment.
What benefits does someone have once approved for the DTC?
- Use it to reduce income taxes owed to the CRA by the individual or their caregiver(s). If the medical practitioner certifies that the disability began years ago, beneficiaries can ask the CRA to adjust taxes for up to 10 years in the past, often resulting in large refunds for overpaid taxes.
- Apply for the Canada Disability Benefit (CDB) if eligible and receive up to $200 per month as of July 2025, adjusted for inflation. In July of 2026, the amount is now up to $204.20 per month.
- Open an RDSP at a qualified financial institution to potentially receive up to $90,000 of grant and bond money from the government. An RDSP is tax deferred so investments can grow significantly over time without being reduced by taxes each year. In every province and territory in Canada, the RDSP is considered an exempt asset, so it will not affect provincial social assistance eligibility.
- Qualify for the Canada workers benefit (CWB) supplement for the individual and/or their spouse which can also reduce income taxes owed at the end of the year.
- The Canada Child Benefit (CBB) has an add on called the Child disability benefit (CDB). This is a tax-free monthly supplement to the CBB available to families who care for a child under the age of 18 who have been approved for the DTC.
- The Home Accessibility Tax Credit provides a tax credit for renovations for the home of the DTC recipient (or the caregiver). Beneficiaries can claim up to 20,000 in renovation expenses resulting in a non-refundable tax credit of up to $3,000 per year.
- Expanded Medical Expense Claims in the form of specialized tutoring for a child with a learning disability, certain types of therapy, or the cost of a full-time attendant or care if specific criteria are met. In addition, beneficiaries may be able to deduct disability related expenses such as sign language interpretation or text to voice software from their income.
- Eligible for the Canada Student Grant for Students with Disabilities that pays up to $2,800 per year to help with the cost of post-secondary education. This grant does not need to be paid back to the government. Beneficiaries do not need to fill out a separate application for this specific grant, as provincial and territorial student aid offices will automatically apply for the benefit based on the applicants own self identification.
- The Home Buyers’ Amount (Line 31270 on T1) is normally only available to anyone who has not owed a home in the previous four years. However, with the DTC, the CRA waives the “first-time buyer” requirement allowing beneficiaries claim a $10,000 amount on taxes even if they have owned a home before. The condition is that they must be moving into a home which is more accessible or better suited to the needs of the person with the disability, and results in a $1,500 non refundable tax credit (as of 2026).
- The First Home Savings Account (FHSA) has a special rule for DTC holders. The exemption helps when using other registered plans like the Home Buyers’ Plan (HBP) or claiming homebuyer tax credits to purchase an accessible home for someone with a disability.
- Access to the Home Buyers Plan (HPB) to withdraw up to $60,000 from a RRSP tax-free ($120,000 for couples) to help with purchase, even if they’ve owned a home before. The buyer must have a DTC themselves or can be buying for a related person with a DTC. The condition is that the new home must be better suited to the beneficiary’s accessibility needs.
- A Qualified Disability Trust (QDT) is a specialized testamentary trust designed for individuals who qualify for the DTC. While most trusts are taxed at the highest possible rate, a QDT benefits from graduated tax rates, meaning the same lower tax brackets applied to individuals. To qualify for this specialized tax treatment, the trust must make a joint election every year with a DTC eligible beneficiary.