Of the numerous non-refundable credits on the 2025 tax return, one of the most valuable ones is the

disability tax credit (DTC). The DTC is a non-refundable tax credit that is intended to recognize the impact of various non-itemizable, disability-related costs. For 2025, the value of the federal credit was 14.5 per cent of $10,138, or $1,470. In addition, there are provincial or territorial tax savings, and together, the combined annual value can be worth up to $3,200, depending on where you live.

To qualify for the DTC, you must complete the Canada Revenue Agency ’s Form T2201 , Disability Tax Credit Certificate, upon which a medical practitioner must certify that you have a “severe and prolonged impairment in physical or mental function.” This form can be completed online or in paper format.

Once the form is completed and sent in, the CRA will either approve the DTC or deny it. If your application is denied, you can appeal the CRA’s decision to the Tax Court, which is what a taxpayer from Newfoundland and Labrador did late last year when the CRA determined that the taxpayer was ineligible for the DTC from 2014 to 2018.

According to the judge, the taxpayer “has not had an easy life.” She spent her adolescent years in foster care and, later, lived in homeless shelters. She ultimately took a two-year college course for which she received her certificate as an instrumentation mechanic. From 2006 to 2008, she worked as a process operator in a processing plant for a mining company. She then went to work in Alberta where she obtained her certification as a national construction safety officer. From 2014 to 2018, the years under review, she worked as an apprentice electrician, a job she still held as of the trial date.

Since 2013, the taxpayer has had to go to the bathroom frequently, four to eight times a day, depending on what she has eaten, likely caused by the removal of her gallbladder earlier that year. At her male-dominated workplace, she feels that “all eyes are on her” when she takes frequent bathroom breaks.

The taxpayer has several gastric conditions, which may include irritable bowel syndrome and diverticulitis. On the DTC certificate, the taxpayer’s doctor opined that she took an inordinate amount of time to manage her bowel functions, which is defined as being at least three times longer than someone of similar age without an impairment in eliminating.

In addition to her gastric issues, her doctor also noted on the DTC certificate that Attention-Deficit/Hyperactivity Disorder (ADHD) impaired the taxpayer’s ability to perform mental functions necessary for everyday life. The doctor indicated that the taxpayer takes medication for her condition, noting that it takes the taxpayer “an inordinate amount of time to perform mental functions necessary for everyday life.” The form noted that the taxpayer participates in cognitive behavioural therapy and dialectical behaviour therapy to help her manage.

The taxpayer explained that she was diagnosed with ADHD in October 2023 and then began taking new medication that was more effective than her earlier medication. She testified that before she was diagnosed with ADHD, she would often become depressed and spent a great deal of time at home, even turning down various family functions. In cross-examination, the taxpayer acknowledged that she would leave home to go to work and shop for groceries.

She testified that her ADHD “affects every aspect of her life,” and that she feels that she has missed out on many things. From time to time, her condition affects her work life such that her doctor has recommended that she take sick leave from work.

The judge reviewed the DTC legislation and the requirements to be eligible for the credit. The Income Tax Act states that “an individual’s ability to perform a basic activity of daily living is markedly restricted only where all or substantially all of the time, even with therapy and the use of appropriate devices and medication, the individual is … unable (or requires an inordinate amount of time) to perform a basic activity of daily living.”

A basic activity of daily living includes eliminating (bowel or bladder functions) and mental functions necessary for everyday life. These functions include: attention, concentration, memory, judgment, perception of reality, problem solving, goal setting, regulation of behaviour and emotions, verbal and non-verbal comprehension and adaptive functioning.

For the taxpayer to be eligible for the DTC, her ability to perform a basic activity of daily living had to be “markedly restricted,” such that either her bowel functions took an inordinate amount of time or her ADHD prevented her from exercising the mental functions necessary for everyday life or that those functions took an inordinate amount of time.

The judge noted that even if the taxpayer had to visit the bathroom four to eight times each day between 2014 and 2018, as she testified, that does not constitute an inordinate amount of time. First, there was no evidence that each bathroom visit took longer than a typical bathroom visit. Second, if one assumes six bathroom visits each day of 10 minutes each, the total amount of time the taxpayer would have spent in the bathroom daily would have been one hour out of 24, or 4.17 per cent of the day, “which is by no means inordinate.”

From 2014 to 2018, the taxpayer worked as an apprentice electrician, which the judge remarked requires training, concentration and attention to detail. As the judge wrote: “Indeed, it calls for the exercise of each of the mental functions listed in the Act. Someone whose attention constantly wanders, and who is unable to focus on her assigned tasks, would have been unable to work as an electrician at all.”

While the judge was sympathetic to the challenges faced by the taxpayer, he concluded that none of her conditions from 2014 to 2018 rose to the level of severity required by the Income Tax Act of markedly restricting her ability to either eliminate (bowel function) or exercise the mental functions necessary for everyday life.

He therefore dismissed her appeal, disallowing the DTC for the years under review.

Jamie Golombek, FCPA, FCA, CFP, CLU, TEP, is the managing director, Tax & Estate Planning with CIBC Private Wealth in Toronto. Jamie.Golombek@cibc.com

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