The Disability Tax Credit is non-refundable, meaning it can only reduce tax owing. If the disabled person has little or no taxable income, they cannot use the credit themselves. The Income Tax Act lets the unused portion be transferred to a supporting spouse, common-law partner, or other family member who is providing financial support. Transferring requires the disabled person to use what they can on their own return first; the unused portion then flows to the supporter on Schedule 2 (spouse) or Schedule 5 (other dependants).
Who can claim the transferred DTC
| Claimant | Relationship to disabled person | Schedule |
|---|---|---|
| Spouse or common-law partner | Married, common-law (12+ months), or parent of a shared child | Schedule 2 |
| Supporting parent or grandparent | Parent, grandparent, including step-parents | Schedule 5 |
| Supporting adult child or grandchild | Adult child or grandchild who supports a disabled parent or grandparent | Schedule 5 |
| Sibling, niece, nephew, aunt, or uncle | Family member who provides ongoing support | Schedule 5 |
“Support” means actually providing financial care for the basic necessities of life. CRA may ask for evidence of payments toward food, shelter, clothing, and similar.
The order of claim
- The disabled person claims the disability amount on their own T1 to reduce their own federal and provincial tax owing.
- If the disabled person’s tax owing is fully eliminated by other credits (basic personal amount, age amount, pension income amount), the unused disability amount becomes available to transfer.
- The transferable portion is calculated using a CRA-provided formula on Schedule 2 (spouse) or the T1 General Income Tax and Benefit Return Step 5 (other supporting individual).
- The supporter claims the transferred amount on their own T1.
Worked example: spouse transfer
Spouse A has $18,000 of taxable income (mostly CPP retirement pension) and qualifies for the DTC. Spouse B has $80,000 of taxable income.
- Spouse A’s federal tax before credits: roughly $2,520 ($18,000 × 14%).
- Spouse A’s basic personal amount (2026 federal): ~$16,129 × 14% = $2,258 of credit.
- Spouse A’s age amount (if 65+): ~$9,028 × 14% = $1,264 of credit (subject to phase-out).
- Spouse A’s federal tax owing after BPA + age amount: $0 (already eliminated).
- Disability amount of $10,341 is therefore unused on Spouse A’s return.
- Spouse B claims $10,341 disability amount on Schedule 2, reducing federal tax by $1,448 plus provincial reduction of typically $400 to $1,400.
The household saves the same $1,800-2,800 of tax that Spouse A could not use directly.
Parent-claiming-for-child
For a child under 18 with DTC eligibility, the parent who supports the child claims the disability amount on Schedule 5 of their T1. The supplement amount for under-18s is also claimed by the supporting parent. Most parents claim the credit on their own return rather than on the child’s because the child has no income.
Adult child claiming for parent
An adult child can claim the DTC for a disabled parent or grandparent if they provide financial support. The supporter must specify the family member’s name and SIN on Schedule 5. CRA may ask for proof of support payments — bank transfers, payment of the parent’s bills, or evidence of in-home care provided.
Common errors
| Error | Detail |
|---|---|
| Both spouses claiming the full disability amount | Only the unused portion (after the disabled spouse’s own use) transfers. Double-claiming triggers reassessment. |
| Two supporting individuals each claiming for the same dependant | Only one person can claim per dependant per year. If multiple people share support, choose one claimant or split by mutual agreement (Form T1 amendments may be needed). |
| Transferring without the disabled person filing | The disabled person must file a T1 (even if zero income) to allow the transfer to be calculated correctly. |
| Wrong schedule | Schedule 2 for spouse; Schedule 5 for other dependants. Using the wrong schedule causes reassessment delays. |
| Missing the supplement for under-18 children | The supplement is claimed on top of the disability amount on Schedule 5 only when claiming for a child under 18. |
Splitting the transfer between two supporters
If two siblings each provide significant support to a disabled parent, only one can claim the DTC for that parent in a given year (s. 118.3(2) limits to a single claimant). Siblings can alternate years by mutual agreement, or one can claim and reimburse the other privately. There is no formal split-claim mechanism on Schedule 5 for the same dependant in the same year.
Effect on the disabled person’s other benefits
Transferring the DTC to a supporting family member does not affect:
- Canada Pension Plan disability or retirement benefits.
- Provincial disability assistance.
- The Canada Disability Benefit (Service Canada-administered, starting July 2025).
- Eligibility for the RDSP and the Canada Disability Savings Grant/Bond.
The DTC is a tax credit; it changes only the tax outcome for the income tax filer who claims it.
Updating after a change in support
If support arrangements change (e.g., the disabled person moves between family members, or a marital breakdown occurs), the new supporter claims for the year they are the supporter for at least the bulk of the year. CRA looks at “the year” as a whole when determining who is the principal supporter.
Cross-references
- Who Qualifies for the Disability Tax Credit?
- DTC Retroactive Claims
- RDSP Rules
- Child Disability Benefit and Canada Disability Benefit
Frequently asked questions
- Can I transfer the Disability Tax Credit to my spouse?
- Yes. If the disabled person has insufficient tax owing to use the credit, the unused portion transfers to the spouse using Schedule 2 of the spouse's T1.
- Can a supporting family member other than a spouse claim the DTC?
- Yes. A supporting parent, grandparent, adult child, sibling, or other relative who provides financial support can claim the unused portion using Schedule 5.
- Does the disabled person need to file a tax return for the transfer to work?
- Yes. The disabled person must file a T1 (even with zero income) so that CRA can calculate the unused portion that transfers to the supporter.
- Can two family members each claim the DTC for the same parent?
- No. Only one person can claim per dependant per year under section 118.3(2). Siblings often alternate years or arrange a private reimbursement.
- How does the DTC supplement for children under 18 work?
- The supplement is added to the base disability amount and claimed by the supporting parent on Schedule 5. It is reduced by attendant care or child care expenses claimed for the child above an indexed threshold.
- Does transferring the DTC affect the disabled person's other benefits?
- No. The DTC transfer only changes the income tax outcome for the claimant. CPP disability, provincial disability assistance, the Canada Disability Benefit, and RDSP eligibility are not affected.
- What does "support" mean for claiming the DTC?
- Actually providing financial care for the basic necessities of life — food, shelter, clothing. CRA may ask for evidence such as bank transfers or payment of bills.