If you have a severe hearing impairment, you may be entitled to claim the disability tax credit (DTC). The DTC is a non-refundable tax credit that is intended to recognize the impact of various non-itemizable disability-related costs. For 2025, the value of the federal credit was $1,470 but add the provincial tax savings and the combined annual value can be more than $3,200, depending on your province of residence. The DTC is also a requirement to qualify for opening a registered disability savings plan (RDSP).
Not every disability qualifies, and there are specific criteria depending on the type of disability. In a case decided in late 2025, a taxpayer who was hard of hearing attempted to claim the DTC for the 2023 taxation year. The taxpayer is a resident of Newfoundland and Labrador who works as a food service supervisor in a school cafeteria kitchen.
For the 2023 tax year, the taxpayer prepared the Canada Revenue Agency’s (CRA’s) required Form T2201, Disability Tax Credit Certificate. The relevant portions of the form were completed by the taxpayer’s audiologist, who made various observations including that the taxpayer has “mild to moderately-severe sensorineural congenital hearing loss in both ears.” She wrote that the taxpayer uses bilateral behind-the-ear hearing aids, and that without these hearing aids she will miss about 86 per cent of the average speech spectrum, versus only missing 27 per cent with optimized hearing aids. The audiologist also noted that hearing speech in a noisy environment will be difficult.
The Form T2201 also asks about the taxpayer’s ability, while using hearing aids, “to hear so as to understand a familiar person in a quiet setting.” To this, the audiologist wrote that the taxpayer “has difficulty, but does not take an inordinate amount of time to hear so as to understand a familiar person in a quiet setting.”
The CRA subsequently reviewed the taxpayer’s submitted form and issued a notice of determination informing the taxpayer that she was not eligible for the DTC. The taxpayer objected and ultimately appealed the CRA’s decision to the Tax Court.
At trial the taxpayer testified that she had to forego certain activities due to her hearing loss. For example, she missed out on playground games when she was a child. She said that it was also impossible for her to go swimming with her hearing aids as the batteries will be damaged if exposed to moisture. She noted that in the gym, sweating would have the same effect.
Occasionally at work, the taxpayer misses out on conversations if the level of background noise is too high and sometimes she needs to ask others to repeat what they have just said. Also, participating in conversations over the phone could be a challenge for her. For example, sometimes during a phone conversation, she may need to ask the other person to send an email to ensure that she has absorbed the information accurately and completely.
The taxpayer can also read lips and she uses that skill to supplement her hearing aids, but this is only useful when the other person is within her line of sight.
The judge reviewed the law governing the DTC, which states that in order to qualify, an individual must have “one or more severe and prolonged impairments in physical … functions … the effects of which are such that the individual’s ability to perform a single basic activity of daily living is markedly restricted.”
The Income Tax Act goes on to clarify that “an individual’s ability to perform a basic activity of daily living is markedly restricted only where all or substantially all of the time, even with … the use of appropriate devices … the individual is … unable (or requires an inordinate amount of time) … to hear) so as to understand, in a quiet setting, another person familiar with the individual.”
In other words, a taxpayer would be eligible for the DTC only if, while using her hearing aids, she was still markedly restricted in her ability to hear and understand a familiar person in a quiet setting.
While the CRA acknowledged that the taxpayer does have a “severe and prolonged impairment” in one of her physical functions, the question was whether she was “markedly restricted” in the ways the law requires.
In court, the taxpayer’s mother, who was representing her, advocated for changes to the Tax Act, saying that most people who are hard of hearing do not spend most of their time in quiet settings. In her view, the test for those hard of hearing should be amended. The judge consequently explained to her that he has “no ability to amend the Act,” which is something that Parliament must do.
While the judge was sympathetic to the challenges faced by the taxpayer while at work or in social or recreational settings, he nonetheless concluded that the taxpayer was simply not eligible for the DTC, since the taxpayer, “while using her hearing aids was not markedly restricted in her ability to hear so as to understand, in a quiet setting, another person who was familiar with her.”
As a result, her claim for the DTC was denied.