How to Claim Disability Tax Credit in Canada for ADHD

This blog was contributed by Maria Soledad de Bilbao, who is a coach for people living with ADHD.

Are you aware that there are provisions in Canada’s tax system that cater to individuals with disabilities, including those with conditions like ADHD? Many people may not realize that they could be eligible for the Disability Tax Credit (DTC), which can provide significant financial relief for those facing challenges due to impairments in physical or mental functions.

Let’s explore ADHD, its impacts, and options for accessing valuable financial support.

What will you find in this article:

• Definition of ADHD
• Impacts of ADHD
• The role of psychological assessments
• Understanding the Disability Tax Credit
• Benefits from the Disability Tax Credit
• How to claim the Disability Tax Credit

What is ADHD?

Attention Deficit Disorder (ADD) and Attention Deficit Hyperactivity Disorder (ADHD) are considered developmental disabilities that affect individuals’ cognitive and behavioral functioning. People with ADHD often experience difficulties in executive functions—mental processes that enable goal-directed behavior, lagging behind up to 30% compared to their peers. These executive functions encompass skills such as organization, time management, and impulse control, which are crucial for success in daily activities, academic pursuits, and professional endeavors. Challenges in executive function (EF) processing can have drastic effects on a person’s world.

Effective management of ADHD often involves a multimodal approach, incorporating various interventions to address the diverse needs of individuals. This comprehensive approach typically includes medication to help regulate neurochemical imbalances, behavioral therapy to teach coping skills and modify behaviors, and ADHD coaching to provide personalized support and build strategies tailored to the individual’s specific needs.

What are the impacts of ADHD?

Attention Deficit Hyperactivity Disorder (ADHD) is a chronic neurodevelopmental disorder that affects over one million Canadians. This disorder knows no boundaries, impacting individuals of all ages, ethnic origins, and socio-economic statuses. Both children and adults grapple with the challenges posed by ADHD, which can significantly hinder academic achievement and overall quality of life. It’s disheartening to note that many students with ADHD struggle to complete high school, facing barriers that impede their educational success. Additionally, individuals with ADHD often contend with comorbid psychiatric disorders, such as anxiety, depression, or substance abuse disorders, further complicating their mental health and well-being. Unfortunately, these comorbidities can contribute to a shorter life expectancy for individuals with ADHD, highlighting the urgent need for comprehensive support and intervention strategies to address the complex needs of this population.

On the flip side, when ADHD is properly understood and managed, it can yield tremendous benefits. Neurodivergent thinking, characteristic of ADHD, involves the ability to connect seemingly unrelated concepts. What may appear irrelevant to a neurotypical individual can spark innovative solutions in someone with ADHD. This unique perspective often leads to creative thinking, a skill at which individuals with ADHD excel. Their creativity can bring fresh insights, unconventional approaches, and out-of-the-box solutions to various challenges, fostering innovation and problem-solving in diverse contexts. Additionally, many individuals with ADHD are entrepreneurs and outside-the-box thinkers, possessing tremendous amounts of energy and the ability to hyperfocus. These qualities enable them to pursue their passions with intensity, often leading to remarkable achievements and contributions in their respective fields.

What is the Disability Tax Credit (DTC)

The DTC is designed to assist individuals who have a severe and prolonged impairment in physical or mental functions that significantly affects their ability to perform everyday tasks. This credit aims to provide financial support to help offset the additional costs associated with living with a disability.

Who is eligible for the DTC?

To qualify for the DTC, individuals must meet certain criteria established by the Canada Revenue Agency (CRA). In the context of ADD and ADHD, one crucial aspect of this process is the assessment of impairments, particularly those related to executive functions, which are controlled by the prefrontal cortex of the brain. Conditions like ADHD, which can impact executive functions such as organization, planning, emotional regulation, and decision-making, may qualify individuals for the DTC.

Disability Credit Canada explains. “Here’s the thing; ADHD does qualify for the DTC, but it is notably harder to qualify as an adult than as a child.” The reasoning behind this is that adults have often developed strategies to manage the condition. However, the irony lies in the fact that early support is crucial for individuals to learn these strategies and coping mechanisms effectively. Frequently, adults experience exhaustion as they grapple with daily tasks that demand significant energy, particularly due to challenges with executive functions. It’s clear that early intervention, approached from various angles, is essential in providing the necessary support.

What is the role of Psychological Assessments / Psychoeducational Assessments in claiming the DTC?

A Psychological assessment for ADHD is critical for an accurate diagnosis and understanding the specific challenges that individuals face. It helps identify symptoms, assess cognitive functions like memory and organization, and differentiate ADHD from other coexisting conditions or disorders, such as learning disabilities, anxiety disorders, or mood disorders. This differential diagnosis is essential for developing a comprehensive treatment plan that addresses all relevant mental health concerns and ensures appropriate support and intervention.

Psychological assessment or psychoeducational assessment plays a crucial role in facilitating accommodations in various settings, including the workplace, school, and family environment. In the workplace, such assessments can identify an individual’s strengths and weaknesses, informing the implementation of accommodations to optimize productivity and job performance. In educational settings, these assessments help educators understand students’ learning styles and needs, enabling the provision of appropriate accommodations to support academic success. Within the family setting, psychoeducational assessments can guide parents in understanding their child’s strengths and challenges, facilitating effective parenting strategies and access to necessary support services.

The journey to claiming the Disability Tax Credit typically begins with a psychological assessment or an assessment from a physician. This assessment serves as the foundation for evaluating the severity and duration of the individual’s impairment. A qualified medical practitioner must certify on T2201 Disability Tax Credit Certificate – Canada.ca, the Disability Tax Credit Certificate, that the individual meets the criteria for the DTC. This form outlines the nature of the impairment and the assistance required for performing daily activities.

How to apply for the DTC?

Once the T2201 Disability Tax Credit Certificate – Canada.ca is completed, it must be submitted to the CRA for review. The CRA assesses the information provided and determines whether the individual meets the eligibility criteria for the Disability Tax Credit. Approval is granted only if the impairment is deemed severe and prolonged, as certified by a medical professional. It’s important to note that approval for the DTC is not automatic and requires careful consideration of the individual’s medical condition.

Starting in 2023, individuals can now apply for the DTC online through CRA’s My Account with data pre-populated from CRA’s files. The system will generate a reference number that the individual can provide to their medical practitioner so they can contribute their portion of the application online. The information is then automatically submitted to the CRA. For more information and apply for the DTC, click here Disability tax credit (DTC) – Canada.ca.

What are the benefits of the Disability Tax Credit

Receiving approval for the Disability Tax Credit can provide various benefits for eligible individuals and their families. Not only does it provide financial assistance through tax savings, but it may also open the door to other government programs and benefits designed to support individuals with disabilities.

• Parents of children eligible for the DTC may be entitled to up to $5,075 of combined (federal + AB) tax relief (2023).
• Parents may also be able to receive an additional $375 if they qualify for the Canada Caregiver Amount.
• Adults who are eligible for the DTC can receive up to $3,035 in combined (federal + AB) tax relief, annually.

If the condition has existed for some time as verified by a qualified medical practitioner, the CRA may allow a retroactive DTC claim for up to 10 years and pay out a lump sum.

The DTC can go a long way in providing much needed funding to help family’s cope with people with disabilities.

What’s next?

If you or someone you know is living with ADHD, it’s essential to explore all available avenues of support. The Disability Tax Credit is a valuable resource that can provide much-needed financial assistance to help alleviate the financial demands associated with living with an impairment. By understanding the eligibility criteria and taking the necessary steps to apply, individuals can access the support they need to thrive despite their impairments.

Remember, claiming the Disability Tax Credit requires careful documentation and assessment, so you should seek guidance from qualified professionals to navigate the process successfully. Don’t hesitate to explore this opportunity for financial relief and support on your journey towards a more manageable and fulfilling life with a disability.

Author

Maria Soledad de Bilbao

ADHD Coach and Advocate, Maria Soledad Coaching

Owner / Teacher, Tango for the Soul

Phone: 403-922-7903
E-mail: soledaddebilbao@gmail.com

Ready to get a head start on 2024 taxes or need help with 2023?