The medical expense tax credit is one of the most overlooked non-refundable tax deductions, according to CBC News. Although most Canadians are aware that the medical expense tax credit exists, many fail to keep the necessary receipts or running tally of expenses.
This tax credit can also be applied to your spouse, common-law partner, and children under 18 years of age. You can also claim medical expenses for your dependents and your spouse’s or common-law partner’s dependents such as parents, grandparents, siblings, aunts, uncles and nieces and nephews.
A portion of the credit comes from the federal government, and a smaller amount is allowed by the provincial and territorial governments.
Canada Revenue Agency (CRA) has compiled a list on its website of allowable deductible expenses. The list is not exhaustive and includes items such as:
- prosthetic limbs
- air conditioners
- bathroom aids
- baby-breathing monitors
- environmental control systems
- medical marihuana
- service animals
Along with the list is the back-up documentation you need to be able to use the deduction. This includes receipts, prescriptions, mileage logs, and proof of any disability.
Claiming medical expenses on your return
- If the expenses are for you and your spouse, common-law partner or dependent child under 18 years of age, you can make the claim on line 33000 of your return.
- If they are for any other dependent, they can be claimed on line 33100.
CRA allows you to use any 12-month period of expenses that is most advantageous to your situation, provided it ends in the current tax year.
There are numerous ineligible deductions for the medical expense tax credit that appears on the CRA website. The more common ones include:
- over-the-counter medications, even with a prescription
- fitness clubs
- cosmetic surgery
- health plan premiums
- diaper services
- personal response systems
There is no penalty for including them. However, they are not deductible.
There are some exceptions to the list. For example, if an expense is necessary for reconstructive surgery resulting from a congenital defect, an accident, or disease, it may be allowed.
Completing The Form
The total amount of eligible expenses that you, your spouse or common-law partner paid can be entered on your return. Your tax credit is arrived at by taking the lesser of the preset percentage or a set amount. You may want to compare your return with your spouse’s or common-law partner’s. In some instances, it may be more advantageous to let that person claim the credit rather than taking it yourself.
On your provincial or territorial form, claim the amount as well. The credit is arrived at and applied using a similar method.
Filing your return electronically or by standard mail
- If you file electronically, keep all the supporting documents in case the CRA asks to see them.
- If you file by mail, attach all supporting documents to your return, including social insurance numbers for individual paid caregivers.
Most Missed Deductions
A number of eligible medical expense tax credits are overlooked every year, according to Ronald Watson, a chartered accountant in Fort Erie. “Some of the most common are the travelling costs to and from treatment, especially chemotherapy or other cancer-related therapy,” Watson said.
“You can also claim out-of-pocket expenses, such as mileage, meals, and lodgings for the driver or caregiver.” But be sure to keep a mileage log. “Under certain circumstances, you are allowed a flat rate,” he said.
Other overlooked expenses include:
- food, shelter and veterinary services for service dogs
- air filters for air conditioners
- money paid to a physician to fill out a disability certificate
- disposable briefs or diapers for someone who is incontinent
- gluten-free food for those who are gluten intolerant
References & Resources
- Caroline Thompson; Thompson Accounting and Tax Inc.; Fort Erie; Ontario
- CRA: Eligible Medical Expenses
- Ronald Watson; Ronald Watson Chartered Accountant; Fort Erie; Ontario