How to Deduct Your Medical Expenses

The Medical Expense Tax Credit is an often overlooked non-refundable tax deduction. Although many Canadians know that they can claim the medical expenses deduction, it can be difficult to know who and what is eligible. So this tax credit often goes unclaimed.

However, the Medical Expense Tax Credit can reduce how much tax you have to pay. Canadians spend around $539 annually on out-of-pocket medical expenses, according to Statistics Canada. So taking the time to add up your expenses and determine whether claiming this deduction could be worthwhile for you.

What medical expenses are tax deductible?

You can claim medical expenses on your income tax return, which can result in a non-refundable tax credit. This means if you have taxes owing, claiming medical expenses can reduce that amount. But it won't result in a refund.

You can claim the tax deduction for medical expenses for costs incurred in any 12-month period that ends in the tax year you are filing. For example, if you are filing your 2024 tax return, and you incurred expenses that you did not previously claim in November 2023 and again in August 2024, your 12-month period may be November 1, 2023, to October 31, 2024.

You can typically claim all amounts you paid for a medical expense, even those you paid outside of Canada. That said, you can only claim part of the expense for which you were not reimbursed. For example, if you have private insurance that reimbursed you for a portion of your medical expenses, you can't claim that portion.

Eligible medical expenses

While remembering to keep the receipts from your medical expenses throughout the year can be challenging, knowing what medical expenses are tax deductible can also be a roadblock to claiming this non-refundable credit.

Fortunately, there's a list of eligible medical expenses from the Canada Revenue Agency (CRA) that can be referenced. Items on that list include:

• prescribed medicines
• health insurance premiums
• dental costs (including portions not covered by the Canadian Dental Care Plan)
• prosthetic limbs
• air conditioners (prescription required)
• bathroom aids
• baby breathing monitors
• crutches
• environmental control systems (prescription required)
• medical cannabis
• service animals
• oxygen

The list above doesn't cover all eligible medical expenses. The CRA maintains a list of 132 medical expenses that are eligible for this tax credit. If you have medical expenses on this list, you must keep the documentation to claim them, which includes receipts, prescriptions, mileage logs, and proof of any disability.

Many eligible medical expense tax credits, such as medical travel expenses, are often missed every year. For example, you can claim out-of-pocket expenses, such as mileage, meals, and lodgings for the driver or caregiver. But be sure to keep a mileage log.

Other overlooked expenses include:

• food, shelter, and veterinary care 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

Ineligible medical expenses

Not all medical expenses are tax deductible. Here are some CRA medical expenses that do not qualify for tax-deductible status.

• over-the-counter medications, even with a prescription
• fitness clubs
• elective surgery solely for cosmetic procedures
• diaper services
• personal response systems

If you accidentally include these ineligible medical expenses in your deductions, you won't be penalized. However, they are not deductible, so the CRA will reject them.

How to claim medical expenses on your income tax return

You can claim eligible medical expenses when you file your income tax return. In fact, TurboTax software automatically asks you for your medical expenses when you file, which can be a help during the busy tax season.

If you're filing your income tax return manually, the first step is determining which line of your taxes to claim your medical expenses.

Here's a brief explainer on how to calculate your medical expenses and how much you should claim:

• If the medical 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 33099 of your return.
• First, add up your medical expenses.
• Next, on the line below line 33099, enter the lesser of the following amounts:
• 3% of your net income (line 23600), or
• $2,759 (for tax year 2024)
• Lastly, subtract the amount of the second line from your medical expenses and enter the result on line 33099 of your income tax return.

You'll claim the amount on your provincial or territorial form as well. The credit is calculated and applied using a similar method.

Suppose you plan to claim medical expenses for a dependant other than those listed above (if you aren't sure whether the person you have in mind qualifies, you'll find a detailed list below). In that case, you'll follow the same steps, but instead of entering your net income, you'll enter your dependant's net income (if applicable) and make your claim on line 33199 of your income tax return.

Is it worth claiming medical expenses on taxes in Canada?

Remember, you'll need to meet the minimum threshold to claim medical expenses in Canada—which is 3% of your net income or $2,759 for tax year 2024—whichever is lower. If this is the case, you may choose not to claim your medical expenses but instead claim them the following year—since you can claim medical expenses on your income tax return for any 12-month period ending in the same tax year.

Here's an example of when claiming medical costs may not be beneficial and how to claim those costs in a subsequent year:

Linda paid $1,500 for her eye LASIK eye surgery in May of last year, which was her only medical expense for the year. Her net income was $60,000, so her 3% threshold is $60,000 x 0.03 = $1,800. Since her total expenses are less than her threshold, she should not claim the costs.

This year, Linda saw a chiropractor regularly until the end of April, which cost her $1,000. She can claim from May 1 of last year until April 30 of this year (a 12-month period). If she has the same net income this year, it is now worthwhile to claim both her LASIK eye surgery and chiropractor visits. Here's why:

Again, Linda's threshold is $60,000 x 0.03 = $1,800. But this year, she has $2,500 in medical expenses ($1,500 + $1,000 = $2,500). So, her claimable amount is her expenses minus her threshold amount: $2,500 - $1,800 = $700).

What is a qualifying dependant?

There are 2 classes of individuals for which you can claim medical expenses. The first class uses line 33099 of your federal tax return. This line is for:

• yourself
• your spouse or common law partner
• your or your spouse or common law partner's children who are under 18 years of age at the end of the tax year

You may also claim medical expenses for another type of dependant, and these dependants must be claimed on line 33199 of your tax return.

• You or your spouse or common law partner's children who were 18 years or older at the end of the tax year
• Your grandchildren
• You or your spouse or common law partner's parents, grandparents, brothers, sisters, uncles, aunts, nephews, or nieces

Claiming medical expenses if you have a disability

Canadians with disabilities can claim medical expenses over and above the limits that typically govern medical expenses.

To claim extra medical expenses, you must have a Disability Tax Credit (DTC) form approved by the CRA (the T2201 form). If you have that form, you can claim the Disability Tax Credit, plus all medical expenses eligible for people with prolonged medical conditions only. With this credit, you can claim these medical expenses—up to certain limits.

• the cost of personal support worker care over $10,000
• the cost of a nursing home

You should calculate the refund you will get on your medical expenses with and without claiming the DTC in Canada to choose the best option to lower your tax liability. TurboTax will calculate this for you automatically.

How do TurboTax products help?

Claiming medical expenses can be confusing. However, using online tax preparation software can take the guesswork out of the process.

TurboTax products have a medical expenses optimizer. You will be asked to list all your medical expenses and choose the period you want to claim. You can either list the medical expenses for you, your spouse, and your dependants under 18 on your profile or split the cost between you and your spouse. The optimizer will choose the scenario that can give your family the maximum refund. You can also override the optimizer and split the expenses as you wish.

The software allows you to input the medical expenses for other dependants over 18 and their net income—automatically calculating how much you can claim.

Once you've input your medical expenses, you can file your income tax return electronically. In this case, you don't need to submit receipts for your medical expenses, but you should keep these supporting documents on file in case the Canada Revenue Agency (CRA) requests copies to verify your deductions.

Alternatively, you can file your income tax return by mail. In this case, you must include copies of your supporting documents with your return. If you claim expenses related to individual paid caregivers, you must include their Social Insurance Numbers (SINs).

File medical expenses with confidence

With TurboTax, you can get answers about medical deductions from tax experts as you go.

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