Québec Medical Expense Tax Credit
What medical expenses can I deduct?
You can deduct medical expenses that you have paid for yourself, your spouse and your dependants. Those are amounts paid to a licensed health practitioner for medical or dental services. For more specific information, please consult IT-519R2 (federal) and IN-130 (Québec).
Is there a period of time that the expenses have to fall into?
The expenses must have been paid during a period of 12 months ending in the tax year for which you are filing the return. If you have already claimed them in a previous year or if you have been reimbursed for them, you cannot claim them again. So if your child needs braces, it is better if all the treatment can be paid for during a 12-month period instead of a few years.
I hear some medical expenses are often overlooked. Can you give me some examples?
- The premiums you paid to a private medical insurance plan, including your employer group plan. The amount will be shown on your last pay stub of the tax year and often appears in box 85 of your T4. Claim that amount on your federal AND on your Québec return. Do not include disability insurance premiums.
- Your contributions to the Québec Prescription Drug Insurance Plan
- The purchase of eyeglasses or contacts (only $200 per person allowed for frames in Québec)
- Travel of at least 40 km for medical services unavailable in your region (line 378 on the TP1)
- Employer contributions to a group medical plan (Québec return only – box J on the Relevé 1)
How do I deduct my medical expenses on my federal return?
The admissible expenses have to be above 3% of your net income. Take Mary and John, a common-law couple without dependants. Mary’s net income is $50,000 and John’s net income is $20,000.
The calculations are based on each individual net income.
- Mary’s federal return indicates $50,000 on line 236 (net income). Her admissible medical expenses are $1,000. She can deduct medical expenses bigger than the smallest of A or B, where A is equal to 3% of her net income ($1,500) OR B, an amount around $2,000 that varies from year to year. Oh no! Her medical expenses of $1,000 are not enough ($1,000 - $1,500 is a negative amount)! But wait...
- John’s federal return indicates $20,000 on line 236 (net income). His admissible medical expenses are $1,500. He can deduct medical expenses bigger than the smallest of A or B, where A is equal to 3% of his net income ($600) OR B, an amount around $2,000 that varies from year to year. Mary and John can add their medical expenses together and claim $1,900 ($2,500 - $600) on John’s federal return.
It is often better for you to put the total of your couple’s medical expenses on the federal return of the spouse with the lowest net income.
How do I claim my medical expenses on my Québec return?
Again, the eligible expenses have to be above 3% of your net income. Take Mary and John, a common-law couple without dependants. Mary’s net income is $50,000 and John’s net income is $20,000.
This time, the calculations are based on the net family income.
- Mary and John’s net family income (lines 275 on the TP1) is $70,000. 3% of that amount is $2,100. Because Mary and John can claim their employers’ contribution to their group medical plan on their Québec return, their medical expenses are now $4,900 ($1,900 + $1,500 each). They can deduct another $560 (($4,900 - $2,100) x 20%) on their Québec return.
Since the deduction is based on your net family income, there is no advantage to putting your medical expenses on one return or the other. Depending on your situation, you may also qualify for the Refundable tax credit for medical expenses (line 462 of the TP1).