20 February 2004 External T.I. 2004-0055741E5 - Disability tax credit

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues:	The individual suffers from or has suffered from several
		health-related illnesses, including a heart condition,
cancer and musculo-skeletal problems and asks whether he qualifies for the disability tax credit.

Position:	General comments provided as to the eligibility for the
		disability tax credit.

Reasons:	The determination of whether an individual is eligible
		for the disability tax credit is one of fact and individual
		circumstance.

XXXXXXXXXX Bob Naufal, CMA
(613) 957-2744
February 20, 2004 2004-005574

Dear XXXXXXXXXX:

Re: Disability Tax Credit

We are writing in response to your letter of December 23, 2003, wherein you asked us if you qualify for the disability tax credit. In the letter, you describe several health related illnesses that you have suffered or are suffering from, including a heart condition, cancer (which has been treated), arthrosclerosis, and ankylosing spondylitis, which is generally a chronic inflammation of the spine and sacroiliac joints. In addition, you describe that your heart condition, spinal pain, the effects of the medication and worry about cancer returning has affected your perception, thought process and memory. You also indicate that you have been unable to perform normal household chores (grass cutting, snow shovelling, painting), minor car and house repairs, take walks with your wife and play with your grandchildren and therefore, your quality of life has been reduced.

Our Comments

Written confirmation of the tax consequences that apply to a particular fact situation is given by this directorate only in the context of an advance ruling request submitted in the manner set out in Information Circular 70-6R5. Moreover, it is a question of fact and circumstance whether a particular individual qualifies for the disability tax credit. In this regard, we are providing the following general comments.

Generally, an individual may claim a disability tax credit if the individual has a severe and prolonged mental or physical impairment such that the individual's ability to perform a basic activity of daily living is markedly restricted. An impairment is considered to be prolonged if it has lasted, or is expected to last (from the time the disability begins), for a continuous period of at least 12 months. An individual's ability to perform a basic activity of daily living is considered to be markedly restricted only if the individual is blind, or is unable to perform a basic activity of daily living, all or substantially all (at least 90%) of the time, even with therapy, the use of appropriate medical devices and medication. An individual's ability to perform a basic activity of daily living may also be considered to be markedly restricted where the performance of the basic activity of daily living requires an inordinate amount of time (significantly longer than for an average person).

A basic activity of daily living is defined to mean:

(a) perceiving, thinking and remembering,
(b) feeding or dressing oneself,
(c) speaking so as to be understood, in a quiet setting, by another person familiar with the individual,
(d) hearing so as to understand, in a quiet setting, another person familiar with the individual,
(e) bowel or bladder functions, or
(f) walking.

No other activity such as working, housekeeping or a social or recreational activity is considered a basic activity of daily living.

Examples of disabling conditions that could satisfy the rules above include severe cardio-respiratory failure, severe mental impairment, profound bilateral deafness, and functional impairment of the neuro or musculo-skeletal systems. Generally, disabling ailments and conditions must be considered on a case-by-case basis, since it is the effect of the impairment on the ability to perform the basic activities of daily living that determines whether an individual is eligible for the disability tax credit.

To claim the disability tax credit, a qualified person (usually a medical doctor) must certify on prescribed Form T2201, Disability Tax Credit Certificate that the individual's impairment is prolonged and that the effects of the impairment are such that the individual's ability to perform a basic activity of daily living is markedly restricted. The form must be filed with the income tax return of the person who is claiming the disability tax credit. Before the income tax return is assessed, the form will be reviewed to determine if the person with the disability is eligible for the credit.

We trust our comments will be of some assistance.

Yours truly,

Wayne Antle, CGA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate