Medical & Disability

Allowable Medical Expenses on Tax Returns

Did your kids get braces last year? Did your spouse’s hockey injury require visits to the physiotherapist? If you’ve paid for medical treatments, you know how much of a toll those unexpected costs can take on your monthly budget. Luckily, many of these costs are allowable medical expenses for tax deductions on your return.

Common Medical Expenses

If you’ve paid for any of these common expenses, you could be in line for some tax relief

  • Prescriptions
  • Dental work
  • Prescription glasses or contacts

That’s Deductible?

Lesser-known medical expenses are often overlooked. Did you miss any of the following eligible expenses?

  • Home renovations for persons with disabilities (or their family members). If modifications were made to improve access or mobility, you may be able to claim the costs.
  • Did your child need tutoring due to a learning disability? The expense may be tax-deductible.
  • If you had to travel more than 40 km (one-way) to seek medical treatment, your travel costs may qualify as a medical expense. For trips more than 80 km (one-way), other related expenses such as meals and accommodations can be added.
  • Private medical insurance premiums are tax-deductible. If your premiums are deducted from your paycheque, check your T4 (box 85) to ensure the amounts are listed. If you pay the premiums directly, total your receipts for the year.

Not sure of your expense qualifies for a credit? Check out the CRA’s full list of eligible expenses.

A Family Affair

When claiming your family’s medical expenses, you’ll usually get more bang for your buck by including all of the expenses on one return. Combine all of your medical costs for you, your spouse, and your children under 18 and claim the total on either spouse’s return.

Did you pick up the tab for another family members’ medical expenses? If you incurred medical expenses for a dependant other than your spouse and minor kids, you may be eligible to claim these costs too. These amounts are calculated separately from the immediate family’s expenses so don’t include them with your own.

The 3% Rule

Depending on your income level, your medical expenses may not have an effect on your bottom line at tax time. The Canada Revenue Agency’s 3% rule excludes a certain amount of your expenses. Your medical expense total must exceed either

  1. Three percent of your net income

Or

  1. The set figure provided by CRA. It changes slightly each year but is around $2,000.

For example, if your net income was $30,000, the first $900 worth of medical expenses don’t count in the calculation of the credit. You’ll only receive a tax break for amounts over $900.

Ineligible Medical Expenses

Other medical expenses aren’t tax-deductible. Don’t include these amounts in your claim

  • Vitamins – Even if prescribed by your doctor, the cost of vitamin supplements (including prenatal vitamins) isn’t a tax-deductible expense. The one exception to this rule is B12 prescribed by a physician.
  • Non-prescription birth control. Although this expense may save you a bundle long-term, you can’t write it off on your return.
  • Botox and teeth whitening services are also ineligible for the medical expenses credit.

A growing number of Canadians are going “gluten-free”. If your doctor certifies that you have a gluten intolerance, you may claim the difference in cost only. For example, if gluten-free pasta is a dollar more than regular pasta, you may claim the dollar difference – not the entire cost of the pasta.

TurboTax helps you get the most from your medical expenses tax deductions, and all tax credits and deductions by automatically searching through more than 400 available credits and deductions to find all the ones that apply to you! Plus, with medical expenses, spousal optimizers assist in determining which spouse should claim pooled expenses in order to maximize your return.