Living with a disability often comes with added financial challenges, from medical expenses to daily care needs. Recognizing this, the Canada Revenue Agency (CRA) continues to offer the Disability Tax Credit (DTC) in 2025 — a vital support program designed to reduce the tax burden for eligible Canadians and their families.
Let’s explore how the DTC works, who qualifies, and what you need to know about the new updates in 2025.
What is the Disability Tax Credit (DTC)?
The Disability Tax Credit is a non-refundable tax credit, which means it helps reduce the amount of income tax you owe but doesn’t result in direct cash payments. The goal is to offer financial relief to individuals with physical or mental impairments, as well as to those caring for them.
In 2025, the credit provides:
- Up to $9,872 for adults (18 years and older)
- Up to $15,630 for children under 18, including a disability supplement
Who Can Apply for the DTC?
To qualify, applicants must meet certain medical and legal conditions:
- A severe and long-term impairment (lasting at least 12 months)
- The impairment must significantly limit everyday activities like walking, dressing, eating, or mental functioning
- The condition must be certified by a licensed medical professional, such as a doctor, optometrist, or occupational therapist
Importantly, approval is not based on diagnosis alone — the impact of the condition on daily life is what CRA considers.
What’s New in 2025?
In addition to the DTC, the federal government has introduced the Canada Disability Benefit (CDB) — a new support aimed at low-income Canadians with disabilities. Starting in July 2025, those approved for the DTC can also receive:
- $2,400 annually (or $200 per month) as a direct payment
- This is meant to help individuals whose needs go beyond what the tax credit covers
This new benefit adds an extra layer of financial security for those most in need.
How to Apply for the DTC
Here’s a step-by-step guide:
- Fill out CRA Form T2201, also known as the Disability Tax Credit Certificate
- The form has two sections: one for the applicant and one for their medical provider
- Submit the completed form to CRA for evaluation
- If approved, you can claim the credit on your annual tax return and possibly receive retroactive credits for up to 10 years
Parents or guardians can claim the credit for children under 18, and if the applicant doesn’t owe taxes, the credit can be transferred to a supporting family member.
The CRA Disability Tax Credit for 2025 continues to serve as a critical financial support tool for Canadians living with disabilities. With the added introduction of the Canada Disability Benefit, the government is taking meaningful steps to ease the burden on vulnerable families.
If you or someone in your care is living with a disability, now is the time to review eligibility and apply. A little paperwork today could mean thousands of dollars in financial relief tomorrow.