What Happens If the CRA Audits Your Disability Tax Credit?
Receiving an audit letter after your DTC was approved can be alarming. But an audit does not mean your credit will be revoked. With the right documentation and a clear, organized response, most audits conclude with the original approval confirmed.
Why Does the CRA Audit Approved DTC Claims?
The CRA's compliance program includes periodic reviews of approved Disability Tax Credit claims. The goal is to verify that applicants continue to meet the eligibility criteria and that the T2201 form was completed accurately by a qualified medical practitioner.
An audit does not imply that you did anything wrong. In many cases, it is simply a routine compliance check. However, it does require you to produce documentation that supports your original application — and the way that documentation is presented matters significantly.
Common Audit Triggers
Random Compliance Review
The CRA runs periodic random audits of approved DTC claims as part of its standard compliance program. There is no specific trigger — your file may simply be selected.
Re-Application After Prior Denial
If your DTC was denied and later approved on re-application, the CRA may audit to verify that the new information provided was accurate and that the approval was warranted.
Inconsistencies in Tax Filings
A significant change in income, a new dependent claim, or a pattern that differs from prior years can prompt CRA to review supporting documentation including your DTC.
Medical Practitioner Review
If the CRA identifies a medical practitioner who has certified a high volume of DTC applications, they may audit a sample of those certifications — including yours.
What Documents Should You Prepare?
When CRA requests documentation, they are looking for evidence that your condition genuinely restricted your daily functioning during the period you claimed the DTC. The following documents are typically requested:
- The original approved T2201 Disability Tax Credit Certificate
- Clinical notes and medical records from your certifying practitioner covering the period of the claim
- Any correspondence with CRA about your DTC application or approval
- Prescription records, therapy logs, or other documentation of ongoing treatment
- A written description of how your condition restricts your daily activities — in functional, not clinical, language
- Records of any assistive devices, home modifications, or support services you use
Important: Functional Language Matters
The CRA evaluates functional impact, not diagnosis. Clinical records that describe your condition in medical terms are necessary but not sufficient. The documentation must also show how your condition restricts your ability to perform basic activities of daily living. My Benefits Canada helps clients translate clinical records into the functional narrative CRA needs to see.
The Audit Timeline
Audit Letter Received
CRA sends a formal letter requesting documentation. Your DTC credits are not automatically revoked — you continue to receive the credit while the audit is in progress.
Documentation Submission
You have 30 days (extendable) to submit the requested documents. My Benefits Canada helps you organize and present your file in the format CRA expects.
CRA Review
CRA reviews the submitted documentation. This typically takes 8 to 16 weeks. Complex cases or those requiring additional medical information may take longer.
Final Determination
CRA issues a final determination. If the audit confirms your eligibility, your DTC continues unchanged. If CRA disagrees, you have the right to object.
How My Benefits Canada Supports You Through an Audit
Responding to a CRA audit requires the same precision as the original application — perhaps more. The documentation must be organized, complete, and presented in a way that directly addresses CRA's eligibility criteria.
My Benefits Canada works with clients who are under audit to review their existing documentation, identify any gaps, coordinate with their medical practitioner to obtain supplementary records, and prepare a comprehensive response package. We communicate with CRA on your behalf throughout the process.
If the audit results in a proposed revocation of your DTC, we will advise you on your right to object and, if appropriate, prepare a formal Notice of Objection.