How to Transfer the Disability Tax Credit to a Spouse or Supporting Family Member

The DTC transfer is one of the most underused provisions in the Canadian tax system. Many families apply for the DTC on behalf of a child, parent, or spouse — and then claim only a fraction of the available credit because they do not realize the unused amount can be transferred to the higher-income family member who actually owes tax.

This guide explains the transfer rules, who qualifies as a supporting person, and how to claim the credit on your tax return.

How the DTC Transfer Works

The Disability Tax Credit reduces federal income tax by approximately $1,500 to $2,200 per year (depending on the tax year and provincial rates). If the person with the disability does not owe enough tax to use the full credit, the unused portion does not simply disappear — it can be transferred.

Two transfer scenarios:

• Transfer to a spouse or common-law partner — claimed on line 32600 of Schedule 1 (Amounts transferred from your spouse or common-law partner)
• Transfer to another supporting family member (parent, grandparent, child, grandchild, sibling, aunt, uncle, niece, nephew) — claimed on line 31800 of Schedule 1 (Disability amount transferred from a dependant)

The amount that can be transferred is the portion of the DTC that the person with the disability cannot use after applying it against their own tax owing.

Who Qualifies as a Supporting Person?

To claim the transferred DTC, you must have supported the person with the disability at some point during the year. CRA's definition of "support" is broad — it includes financial support, housing, or providing care.

Eligible supporting persons:

• Spouse or common-law partner
• Parent or grandparent
• Child or grandchild
• Sibling (brother or sister)
• Aunt, uncle, niece, or nephew

You do not need to live with the person with the disability to qualify as a supporting person, but you must have contributed to their support during the tax year.

Step-by-Step: How to Claim the Transferred DTC

Step 1: Confirm DTC approval The person with the disability must have an approved T2201 on file with CRA. The approval letter specifies the years for which the DTC is valid.

Step 2: Determine the unused amount Calculate how much of the DTC the person with the disability cannot use. If their taxable income is zero or very low, the full credit amount is typically available for transfer.

Step 3: Identify the supporting person Only one supporting person can claim the transferred DTC in a given tax year. If multiple family members contributed to support, they must agree on who will claim it.

Step 4: Claim on your tax return

• Spouse/common-law partner: Enter the transferred amount on line 32600 of your Schedule 1
• Other supporting family member: Enter the transferred amount on line 31800 of your Schedule 1

Step 5: Update the T2201 if needed If the original T2201 did not identify you as the supporting person, you may need to contact CRA to update the file. This is particularly common when the supporting person changes from year to year.

The Child Supplement and Transfer

For children under 18 with an approved DTC, an additional child supplement is available. For the 2025 tax year, the child supplement is approximately $5,500 (federal), bringing the total DTC value for a child to roughly $14,000 in federal credit.

This supplement is claimed by the parent or supporting person who claims the child's DTC transfer. It is automatically included when you claim the transferred disability amount for a dependent child under 18.

Claiming the Transfer Retroactively

If you have been supporting a family member with an approved DTC for multiple years but did not claim the transfer, you can file adjustments for up to 10 prior tax years using a T1-ADJ form (Request for Adjustments).

This is one of the most significant retroactive opportunities in Canadian tax law. A parent who has been supporting a child with autism or a developmental disability for 10 years, for example, may be entitled to a retroactive refund of $15,000 to $40,000 or more — depending on their income and provincial tax rates.

My Benefits Canada manages the full retroactive adjustment process, including calculating the optimal claiming strategy across multiple years and coordinating with CRA on your behalf.

Common Mistakes to Avoid

Mistake 1: Assuming the transfer is automatic The transfer does not happen automatically. You must actively claim it on your tax return each year, or file adjustments for prior years.

Mistake 2: Claiming the full DTC when the person with the disability has some income If the person with the disability has taxable income, they should apply the DTC against their own tax first. Only the unused portion can be transferred.

Mistake 3: Multiple family members claiming the same transfer Only one person can claim the transferred DTC in a given year. If two family members both claim it, CRA will reassess and disallow one of the claims.

Mistake 4: Missing the child supplement The child supplement for children under 18 is substantial and is often missed by families who are not aware it exists. Make sure you are claiming the full amount.

How My Benefits Canada Helps

When we manage a DTC application, we calculate the optimal claiming strategy for your family — including who should claim the transfer, how to maximize the child supplement, and how to structure retroactive adjustments across multiple years.

Start your free eligibility assessment to find out how much your family may be entitled to.

Frequently Asked Questions

Can I transfer the DTC to my parent? Yes. If you are supporting a parent with an approved DTC and they cannot use the full credit, you can claim the unused portion on line 31800 of your Schedule 1.

What if my spouse and I both want to claim the transferred DTC? Only one spouse can claim the transferred DTC in a given year. Typically, the higher-income spouse claims it to maximize the tax reduction.

Can I claim the DTC transfer retroactively? Yes. You can file T1-ADJ adjustments for up to 10 prior tax years to claim the transferred DTC for years you missed.

Does the person with the disability need to file a tax return? Yes. The person with the disability should file a tax return each year, even if they have no income, so CRA can calculate the unused DTC amount available for transfer.

What is the child supplement for the DTC? For children under 18, an additional supplement of approximately $5,500 (federal, 2025 tax year) is available on top of the base DTC amount. It is claimed by the parent or supporting person.