Medical expenses included on T4

Understanding how to claim medical expenses on your tax return can be a bit tricky, especially when factoring in insurance premiums and thresholds set by the Canada Revenue Agency (CRA).

This guide will answer your top questions about making a medical expense claim, including how much you need to spend, how to include insurance premiums paid through your employer, and tips for maximizing your claim—particularly if you're filing jointly with a spouse.

How much can I claim in medical expenses?

The answer to this question is the lesser of 3% of your net income (reported on line 23600 of your T1 Income Tax and Benefit Return) or the medical threshold established for the tax year. The CRA changes this number every year. But you can find it on the income tax return form. For 2024, the total is $2,759.

How do I claim the insurance premium I pay through my employer?

If you are participating with your employer in a health insurance plan, it means some of the premiums are paid by you and some are paid by your employer. Your employers will include your portion of premiums paid in box 85 of your T4 slip. So, when adding up all of your medical expenses, don’t forget to include this amount. If you are claiming medical expenses for you and your spouse, make sure to add box 85 of their T4 as well. When you choose TurboTax, the software will automatically apply it to your tax return.

For Quebec residents, you will find the benefit related to the employer’s contribution, shown in box J of the RL-1 slip or box B of the RL-22 slip. The amount of the payments made to an insurer or a group insurance plan may be shown in box 235 of the RL-1 or RL-2 slip.

Which medical expenses can I claim?

If your work-based or private health insurance plan only covers a portion of your medical expenses, you may be able to claim the remaining amount on your tax return. For example, if your insurance reimburses 80% of the cost of a prescription, you can claim the remaining 20% as an eligible medical expense.

To ensure you claim the correct amount:

• Keep detailed records of all medical expenses and insurance reimbursements.

• Only claim the portion that was not reimbursed by your insurer.

• If you receive a reimbursement for an expense in the following year, you may need to adjust your claim accordingly.

To maximize your tax deduction, it's important to understand which costs you can include on your return. Eligible medical expenses typically cover:

• Dental treatments. Fees paid for dental services, including cleanings, fillings, and orthodontics.

• Medical devices. The cost of medical devices such as hearing aids, wheelchairs, and prescription glasses or contact lenses.

• Prescription medications. Prescription drugs that are legally prescribed and recorded by a pharmacist.

• Travel expenses. If you need to travel at least 40 kilometres one way for medical treatment not available locally, you can claim travel costs, including mileage, accommodation, and meals.

• Professional services. Costs associated with services from medical practitioners like physiotherapists, psychologists, and chiropractors.

• Home care. Expenses for home care services or renovations to your home to accommodate a medical condition, such as installing ramps or modifying a bathroom.

By including all eligible expenses, you're making the most of your potential deductions, reducing your taxable income, and possibly increasing your refund.

Another way to get your prescription receipts

If you haven’t saved each prescription receipt, don’t worry! Go to your pharmacy and ask them for your prescription summary. This is a quick way to get the total for your prescription receipts without adding each receipt.

Don’t forget that if you’re married, it’s normally better to claim medical expenses on the spouse with the lower income. Since you will deduct 3% of the net income, their threshold is lower so more of the medical expenses will be claimed.

TurboTax products have a medical expenses optimizer that gives you the best result for your family situation. Consider TurboTax Live Assist & Review if you need further guidance, Or, choose TurboTax Live Full Service and have one of our tax experts do your return from start to finish (not available for Quebec residents).

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