Refusals and appeals
A refusal is common, and it is not the end of the road. The CRA refuses many DTC applications on the papers as written, not because the person's life is easy, but because the form did not show, in the CRA's terms, a severe and prolonged restriction. Understanding which of the common reasons applies to your file decides whether the next step should be a clarification letter, a fresh application, or a formal objection. Start by reading the notice of determination carefully: it states the reason, and the reason points to the remedy.
Common reasons for refusal
| Reason | What it usually means |
|---|---|
| Diagnosis without function | The form named a condition but never described what the person cannot do, or how long tasks take |
| Not "all or substantially all of the time" | The restriction was described as occasional, or as present only on bad days, rather than at least 90% of the time |
| Duration under 12 months | The practitioner certified a period shorter than 12 continuous months, or the onset date was too recent |
| Cumulative effect not shown | Two significant restrictions were listed but never added together into an equivalent marked restriction |
| Therapy hours not documented | Life-sustaining therapy was claimed without the 14-hours-per-week breakdown the CRA requires |
| Wrong practitioner for the category | The category was certified by a practitioner not qualified to certify it |
| Information missing | The CRA asked for more information and the file was decided without it |
Step one: ask for a second review
If you disagree with a refusal and have medical information that has not already been sent, write to your tax centre and ask the CRA to review the application again, enclosing that information. The most useful addition is usually a letter from a practitioner who knows the person's situation, describing in functional terms how the impairment affects the activities of daily living, with time, distance, and frequency. A letter that repeats the diagnosis in stronger language, without new functional detail, rarely changes the result. Keep a copy of everything you send, and note the date you sent it.
Step two: formal objection, within 90 days
You can also formally object to the CRA's decision. The time limit for filing an objection is no later than 90 days after the notice of determination is mailed to you. Do not assume that waiting for an informal review extends that deadline: diarise the objection date when the notice arrives, even if you hope the review will succeed first. If an objection is unsuccessful, a further appeal lies to the Tax Court of Canada. Each stage has its own forms and deadlines, so take advice early if the file is going beyond a second review.
Reapplying with a fresh form
A refusal does not prevent a fresh application. If the impairment has worsened, if a different practitioner knows the person's situation better, or if the first form was poorly written, a new T2201 with better functional evidence can succeed where the first one failed. A fresh application is not, however, a substitute for an objection where the deadline is running: if you intend to object, file the objection on time and reapply in parallel if advice supports doing both. And if a condition improves so that the DTC test is no longer met, the person must tell the CRA; keeping a credit after eligibility has ended creates a debt that will be collected later.
Sources: Canada Revenue Agency, "Demystifying the disability tax credit" and guide RC4064 on canada.ca (second review, 90-day objection limit, Tax Court appeal).
Photo credits: dt25.jpg — k; dt26.jpg — k; dt27.jpg — k