Federal Tax Deductions & Credits

Summary
The disability tax credit is a non-refundable tax credit that provides tax relief for individuals who have a severe and prolonged impairment in physical or mental functions by providing a credit against Part I taxes payable. The disability tax credit also includes a supplement for a person with severe and prolonged impairment in physical or mental functions who was under 18 years of age at the end of the tax year.

Prolonged impairment

2.4 Paragraph 118.4(1)(a) provides that an impairment is prolonged when it has lasted, or may reasonably be expected to last, for a continuous period of at least 12 months. This expectation test is applied at the time the disability begins. However, a claim will not be denied solely because the person dies within the 12-month period.
Markedly restricted

2.5 Paragraph 118.4(1)(b) provides that an individual’s ability to perform a basic activity of daily living is markedly restricted only when the individual is blind or is unable (or requires an inordinate amount of time) to perform such an activity, all or substantially all of the time, even with therapy and the use of appropriate devices and medication.

2.6 In ¶2.5 above, an individual is viewed as being markedly restricted in performing a basic activity of daily living all or substantially all of the time, when the individual’s ability to perform such an activity is restricted at least 90% of the time. When the individual’s ability to perform such an activity is not restricted for at least 90% of the time, the individual may be viewed as not being markedly restricted.

Basic activity of daily living

2.8 A basic activity of daily living in relation to an individual is described in paragraph 118.4(1)(c) as meaning:
the mental functions necessary for everyday life;
Mental functions necessary for everyday life

2.9 Paragraph 118.4(1)(c.1) describes mental functions necessary for everyday life to include:

• • memory;
  • problem solving, goal-setting and judgement (taken together); and
  • adaptive functioning.

Inordinate amount of time

2.13 To meet the requirement of an inordinate amount of time to perform a basic activity of daily living (see ¶2.5), an individual must take significantly more time than is usually required by persons who do not have the individual’s impairment. It is a question of fact whether an individual takes an inordinate amount of time to perform an activity in any particular case.

Specific medical conditions and eligibility for the disability tax credit

2.16 Claims for the disability tax credit must generally be considered on a case-by-case basis. It is the effect of one or more impairments in physical or mental functions on a person’s ability to perform the basic activities of daily living, which effects differ from person to person, rather than a medical condition itself (except where the person is blind), that determines whether a person is eligible for the disability tax credit.