The Canadian tax system provides various deductions and credits for individuals with disabilities. One of the most underutilized yet powerful deductions is the Disability Supports Deduction, which helps cover expenses directly related to employment, education, or professional research. This deduction is separate from the Disability Tax Credit and offers more flexibility in claiming certain support services and devices.
In this comprehensive guide, we’ll explore the eligibility rules, deductible items, applicable CRA forms, and how to ensure you claim the maximum deduction available under this important tax benefit.
1. What Is the Disability Supports Deduction?
The Disability Supports Deduction allows people with physical or mental impairments to deduct expenses they incurred to earn income, go to school, or perform research. It helps level the playing field for individuals facing extra costs to participate in the workforce or educational environment.
This deduction is claimed on line 21500 of the T1 General Income Tax Return.
2. Who Can Claim This Deduction?
To claim the Disability Supports Deduction, you must:
- Be eligible for the Disability Tax Credit or have a medically certified impairment.
- Incur eligible expenses to earn income from employment or self-employment, attend a designated educational institution, or carry out research funded under the Income Tax Act.
- Have paid for the supports yourself (i.e., they were not reimbursed by a government program or insurance plan).
3. What Types of Expenses Are Eligible?
The CRA allows a variety of medical devices and services under the Disability Supports Deduction. Common eligible supports include:
- Attendant care services (e.g., in the workplace or classroom)
- Talking textbooks for visually impaired individuals
- Text-to-speech and speech recognition software
- Note-taking services or reading services
- Voice amplification equipment
- Sign language interpretation services
- Optical scanners or screen reading devices
- Real-time captioning services
- TTY phone systems (text telephones)
- Electronic speech synthesizers
All items must be used by the individual for the purpose of work, school, or research. The supports cannot be used primarily for personal or recreational purposes.
4. What CRA Form Is Required?
To claim the deduction, you need to complete and file Form T929 – Disability Supports Deduction. This form allows you to:
- List each eligible expense
- Specify the amount paid and to whom
- Indicate the condition or reason for the support
- Attach receipts or statements as proof of payment
The total from Form T929 is transferred to line 21500 of your income tax return. The form does not need to be submitted with your return unless CRA requests it, but you must retain all supporting documents for at least six years.
5. Differences Between the Disability Tax Credit and This Deduction
It’s important not to confuse the Disability Supports Deduction with the Disability Tax Credit (DTC). The DTC is a non-refundable credit designed to reduce the amount of tax you owe, while the supports deduction reduces your taxable income directly.
You may qualify for both in a given year, but each serves a different purpose:
- DTC: Claimed using Form T2201 (requires CRA approval)
- Disability Supports Deduction: Claimed annually using Form T929 (based on actual expenses)
6. Can the Deduction Be Transferred?
No, the Disability Supports Deduction is non-transferable. Only the individual with the disability who paid for the supports may claim the deduction. However, if the person also qualifies for the DTC, that credit may be transferred to a supporting family member.
7. Tax Filing Tips for Claiming the Deduction
- Keep all receipts: CRA requires you to retain documentation for each expense claimed.
- Use certified software: Most tax preparation software includes Form T929.
- Don’t double-claim: If you claim an amount under medical expenses, you cannot also claim it as a disability support deduction.
- Review annual eligibility: You must re-assess your eligibility every tax year. The deduction is not automatic.
8. What If You Forgot to Claim in Previous Years?
If you were eligible in prior years but didn’t claim the deduction, you may file an adjustment request using Form T1-ADJ or the “Change My Return” feature on CRA MyAccount. You can usually go back up to 10 years to claim missed deductions, provided you have proper documentation.
9. Final Thoughts
The Disability Supports Deduction is a valuable but often overlooked tool in Canada’s tax system. If you require specialized supports to work, study, or conduct research, you may be eligible for significant tax savings. While the credit is subject to certain rules, the flexibility and breadth of eligible expenses make it worth exploring.
To ensure you receive all the deductions you’re entitled to, maintain good records, review CRA’s eligibility guidelines annually, and consider speaking with a tax professional if you have complex needs or expenses.