What Happens When the Canada Revenue Agency Denies Your Disability Tax Credit

When the Canada Revenue Agency (CRA) denies your Disability Tax Credit (DTC) process, you have the right to challenge that decision. The appeal process has three stages: a CRA review, then the Tax Court of Canada if you disagree with the review, and finally the Federal Court of Appeal if needed. Most people stop at the first stage because a CRA review officer will look at your process again and sometimes reverse the original decision.

You do not need a lawyer to appeal, though many people hire a tax accountant or disability lawyer to help. The process takes time—expect 4 to 12 months for a CRA review, longer if you go to court. You can appeal even if you have already filed your tax return without claiming the credit.

Key Takeaways

  • A CRA review is your first appeal step and costs nothing; send a written request within 90 days of the denial letter.
  • Include new medical evidence or a clearer explanation of how your condition affects daily living, because the review officer will re-examine your file.
  • If the CRA review upholds the denial, you can file a Notice of Objection with the Tax Court of Canada within 90 days.
  • A tax accountant or lawyer familiar with DTC cases can strengthen your appeal by organizing medical records and writing a persuasive summary.
  • You can claim the DTC retroactively for up to 10 years if your appeal succeeds, which may result in a refund.

Understanding the CRA Denial Letter and Your 90-Day Window

The CRA sends a letter explaining why your DTC process was denied. Read it carefully—it will say which parts of the DTC definition your process did not meet. The CRA looks at whether your condition causes a severe and prolonged impairment in one or more areas of daily living: walking, dressing, feeding, toileting, perceiving, thinking, remembering, or hearing and speaking.

You have 90 days from the date on the denial letter to request a CRA review. This important date is firm; if you miss it, you lose the right to appeal through the CRA and must go directly to the Tax Court, which is more expensive and formal. Mark the 90-day date on your calendar and send your request before that date.

How to Request a CRA Review

Write a letter to the CRA and clearly state that you are requesting a review of your DTC denial. Include your name, Social Insurance Number, and the date of the denial letter. Mail it to the CRA office that sent your denial—the address will be on the letter. You can also deliver it in person to a CRA office or send it by registered mail so you have proof of delivery.

In your letter, explain why you believe the decision was wrong. Point out specific parts of the denial letter and say what the CRA missed or misunderstood. For example, if the CRA said your condition does not prevent you from walking, explain how far you can actually walk, how much pain you have, and what help you need. Be concrete: "I can walk 50 metres before needing to sit down" is stronger than "I have trouble walking."

Include new medical evidence if you have it. This might be a letter from your doctor, a recent assessment, test results, or a report from a physiotherapist or occupational therapist. The new evidence should directly address the areas where the CRA said your process was weak. If your condition has worsened since you first applied, include documentation of that change.

What the CRA Review Officer Will Do

A different CRA officer will read your request, your original process, the denial letter, and any new medical evidence you sent. They will not interview you unless they decide they need more information. The review officer has the power to reverse the original decision, uphold it, or ask for more details from your doctor.

The review usually takes 4 to 12 months. The CRA will send you a letter with the result. If the review officer agrees with you, the CRA will approve your DTC and you can claim it on your current and past tax returns (back to the year you first became may be able to access, up to 10 years). If the review officer upholds the denial, you can move to the next stage: filing a Notice of Objection with the Tax Court of Canada.

Filing a Notice of Objection and Going to Tax Court

If the CRA review does not change the decision, you can file a Notice of Objection. This is a formal document that tells the Tax Court of Canada you want to challenge the CRA's decision. You have 90 days from the date of the CRA review decision letter to file it. The form is available on the CRA website, or you can write a letter that includes your name, Social Insurance Number, the date of the decision you are objecting to, and a brief statement of why you disagree.

Mail the Notice of Objection to the address shown on the CRA review decision letter. The Tax Court process is more formal than a CRA review. You may need to provide sworn testimony about your condition, and the CRA will present its case. Many people hire a tax lawyer at this stage because the court has specific rules about evidence and procedure.

Tax Court cases typically take 12 to 24 months from filing to decision. If you win, the court will send the case back to the CRA to approve your DTC. If you lose, you can appeal to the Federal Court of Appeal, though this is rare and requires a lawyer.

Gathering Strong Medical Evidence for Your Appeal

Medical evidence is the foundation of a DTC appeal. The CRA needs to see that your doctor or another may have access to medical professional agrees your condition is severe and prolonged and affects your daily living. A letter from your doctor that straightforward says "the patient has [condition]" is usually not enough. The CRA wants to know the specific impact: how the condition limits you, what you cannot do without help, and how often the limitation occurs.

Ask your doctor to write a detailed letter that addresses the areas the CRA said were weak. If the CRA said you can walk normally, ask your doctor to document your walking distance, pain level, and need for aids or rest. If the CRA questioned your ability to think or remember, ask for cognitive testing results or a neuropsychological assessment. If your condition is mental health–related, ask your doctor to describe how it affects your ability to function day to day, not just the diagnosis.

Occupational therapists and physiotherapists can also provide strong evidence. They assess how your condition affects real tasks—dressing, bathing, cooking, managing money. Their reports often carry weight with the CRA because they are based on direct observation and standardized assessment tools.

When to Hire a Tax Professional or Lawyer

You can appeal on your own, but many people find it helpful to work with someone who knows DTC cases. A tax accountant or lawyer can organize your medical records, write a persuasive summary of your case, and represent you if you go to Tax Court. Some charge a flat fee for a CRA review appeal (often $500 to $1,500); others charge hourly rates or take a percentage of any refund you receive.

If you go to Tax Court, a lawyer becomes more important. Tax Court has strict rules about evidence, and the CRA will have a lawyer presenting its side. A disability lawyer or tax lawyer familiar with DTC cases will know how to present your medical evidence effectively and how to question the CRA's position.

You can find a lawyer through your provincial law society, through disability organizations, or by searching "disability tax credit lawyer" in your province. Many offer a free initial consultation so you can ask whether they think your case is strong and what they would charge.

What Happens If Your Appeal Succeeds

If the CRA approves your DTC during a review or after Tax Court, you can claim the credit on your current tax return and on past returns going back up to 10 years. You will need to file amended tax returns (called T1 Adjustments) for each year you want to claim the credit. The CRA will calculate any refunds owed and send them to you.

Once approved, your DTC is usually valid for 10 years. The CRA may ask you to renew it at the end of that period by submitting a new process with updated medical evidence. If your condition improves significantly, the CRA may deny renewal, but if your condition is stable or worsening, renewal is usually straightforward.

Frequently Asked Questions

Can I appeal if I missed the 90-day important date?

If you missed the 90-day important date for a CRA review, you cannot appeal through the CRA. However, you may be able to file a Notice of Objection directly with the Tax Court of Canada if you do so within one year of the original denial letter. You would need to explain to the court why you missed the CRA important date. A lawyer can help you make this argument, though success is not may provide.

Do I need new medical evidence to appeal, or can I use the same documents from my original process?

You can use the same medical evidence, but new evidence often strengthens an appeal. If your original process was weak because your doctor's letter was vague, a new, more detailed letter from the same doctor can make a difference. If your condition has worsened or you have had new testing, include those results. The review officer is looking for anything that clarifies how your condition affects daily living.

How much does it cost to appeal?

A CRA review costs nothing. If you hire a tax accountant or lawyer to help with the review, you will pay their fees, which vary widely. Tax Court filing has a small fee (currently around $250), and if you hire a lawyer for court, expect to pay $2,000 to $10,000 or more depending on the complexity of your case and your location.

Can I claim the DTC for years before I applied if my appeal succeeds?

Yes. If your appeal succeeds and the CRA agrees you became disabled before you applied, you can claim the DTC retroactively for up to 10 years. You will file amended tax returns for each may be able to access year, and the CRA will calculate refunds. This can result in a significant payment if you are owed credits for multiple years.

What if I appeal and lose at Tax Court?

You can appeal the Tax Court decision to the Federal Court of Appeal, but this is rare and expensive. You would need a lawyer, and the court will only hear your case if there is a serious legal error in the Tax Court's decision, not straightforward because you disagree with the outcome. Most people do not pursue this option.