Visually impaired person walking in the street
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The disability tax credit (DTC) is underused due to complexities in the application process, tax filing difficulties and challenges with CRA processes and contact centres, according to the 2024 annual report issued by the tax agency’s disability advisory committee.

Although 96.6% of completed applications are approved, only one-quarter of people with disability who are likely eligible submitted a completed DTC application. And of those with a DTC certificate, only 64% claimed the credit in 2022, according to the report.

Among its 18 recommendations, the committee suggested the CRA improve awareness of the program and simplify the application process.

Many eligible Canadians don’t understand the benefits associated with a DTC certificate, such as opening a registered disability savings account or the upcoming Canada Disability Benefit, the report said.

The committee recommended targeted awareness campaigns to hard-to-reach people with disabilities, such as the homeless and Indigenous people, as well as medical practitioners who help fill in the application form.

Misconceptions about DTC eligibility among medical practitioners mean some practitioners may discourage eligible individuals from applying, the report said.

Partnerships with Indigenous communities and health authorities can increase awareness among potential applicants while collaboration with practitioner associations can improve DTC understanding among medical professionals.

The committee also found the complex application process to be a barrier to accessing the DTC. Only 24% of online DTC applications are completed, “highlighting that difficulties in finalizing applications remain a critical issue,” the report said.

The application for the DTC consists of two parts. Part A of the T2201 form is completed by applicant and Part B by a medical practitioner who provides eligibility information. Last year, the government estimated that 75% of DTC applicants used professional services such as lawyers and DTC promoters to complete the process.

In addition, provinces and the federal government may have different definitions of what constitutes a disability, which makes the system confusing and difficult to navigate. The committee advocated for a simplified and centralized application process and to work with the disability community to establish a common definition of disability.

Some of these issues lie outside of the CRA’s mandate, so addressing DTC issues will require collaboration with Finance Canada to amend the Income Tax Act and Employment and Social Development Canada to develop accessibility reforms, the report noted.