Are you aware that in Canada, you can claim medical expenses on your income tax return? That’s right! As long as you meet certain criteria and have the necessary documentation, there are a wide range of medical expenses that qualify for deductions. So, if you’ve been wondering about what medical expenses can you deduct Canada, keep reading!
First things first, you should know that medical expenses can only be claimed on your tax return if they exceed a certain threshold. The threshold is calculated as a percentage of your net income, so the more you make, the higher the threshold will be. It’s important to keep all your receipts and documentation, as the Canada Revenue Agency (CRA) may request to see proof of your expenses.
In terms of what medical expenses can you deduct Canada, the list is quite extensive. You can claim expenses such as prescription medications, dental work, medical services, and even travel expenses related to medical treatment. However, there are certain restrictions and rules, such as the fact that cosmetic procedures and over-the-counter medications are generally not eligible for deductions. It’s crucial to understand the specifics of what you can and cannot claim, so be sure to consult with a tax professional or the CRA website for more information.
Eligibility for Medical Expense Deductions in Canada
Medical expenses can put a significant strain on your finances, especially if you require ongoing treatments and medications. However, the Canadian government offers some tax relief through their medical expense deductions program. To be eligible for this program, you must meet the following criteria:
- You must have paid for medical expenses for yourself, your spouse or common-law partner, and/or your dependent children under 18 years old.
- The medical expenses must have been paid within any 12-month period ending in the taxation year that you are claiming the expenses.
- The medical expenses must have been paid to a qualified medical practitioner or institution as defined by the Income Tax Act in Canada.
- You must not have been reimbursed for the expenses by any other source, such as a private insurance plan or a government program.
Keep in mind that not all medical expenses are eligible for deduction. The Canadian government has a long list of allowable medical expenses, which includes common expenses such as prescription medications, dental services, and eyeglasses. However, some medical procedures such as cosmetic surgery or non-prescription medicine are not eligible for deduction.
If you are unsure whether a medical expense is eligible for deduction, it is recommended that you contact the Canada Revenue Agency or consult with a tax professional.
Types of Medical Expenses That Can Be Deducted in Canada
When it comes to filing taxes in Canada, medical expenses can be one of the many deductions you can take advantage of. Here are the different types of medical expenses that can be deducted:
- Health services provided by a medical practitioner or dentist;
- Purchase, repair, or maintenance of medical or dental devices like hearing aids, artificial limbs, or wheelchairs;
- Prescription drugs and other substances;
- Medical treatments offered outside Canada;
- Travel expenses required to obtain medical treatment not available locally;
- Home renovations for medical reasons, including installing ramps or elevators;
- Expenses for counseling services, including psychologists and social workers;
- Attendant care;
- Expenses related to a medical condition, such as fertility treatments;
- Expenses related to an individual with a disability, such as sign language interpretation or Braille education;
- Expenses related to a deceased individual, including funeral services and legal expenses incurred in settling the final estate.
Expenses for Medical Services in Canada
Canada has a universal healthcare system that covers most medical expenses, including hospital stays and doctor’s visits. However, there are still expenses that need to be paid out of pocket. These expenses can be claimed as deductions on your taxes as long as they are not already covered by insurance or a government program. One thing to note is that the cost of cosmetic procedures, like botox injections or teeth whitening, cannot be claimed as a medical expense.
The table below lists some of the most common medical expenses that can be claimed as deductions in Canada:
| Expense | Inclusion Criteria | Eligible Amount |
|---|---|---|
| Dental Treatment | Diagnostic, preventative, and restorative services | Amounts paid out of pocket |
| Prescription Medications | Prescribed by a medical practitioner | Amounts paid out of pocket |
| Medical Apparatus and Devices | Devices prescribed by a medical practitioner | Amounts paid out of pocket |
| Travel Expenses | Travel more than 40 km one way to access medical treatment | Transportation costs (ex. gas or public transit fees); meals and lodging for the patient (up to $100 per night) |
| Home Modifications | Designed for a person with mobility limitations, including ramps and elevators | Amounts paid out of pocket |
It’s important to keep receipts and records of all your medical expenses throughout the year. This documentation will help support your claims when filing your taxes. Remember, the total amount of eligible medical expenses is subject to a threshold, which is based on your net income from the previous year.
How to Calculate and Claim Medical Expense Deductions in Canada
As a Canadian taxpayer, you are allowed to claim a deduction for medical expenses that you have paid for yourself, your spouse or common-law partner, and your dependents. The medical expense deduction helps to reduce your tax liability and can result in a tax refund. Here are the steps to calculate and claim medical expense deductions in Canada.
Eligible Medical Expenses
- Prescription drugs
- Dental services
- Medical equipment
- Eye exams
- Professional services such as physiotherapy and acupuncture
- Travel expenses for medical treatment
Calculating Your Medical Expenses
To calculate your medical expenses, you must first determine the total amount of eligible expenses that you or your dependents have paid during the tax year. You can then subtract any reimbursements that you have received from insurance or other sources. You are only allowed to claim expenses that have not been reimbursed.
Next, you must either choose to claim the expenses for the current tax year or carry forward the expenses to a future year. If you choose to carry forward your expenses, you can only claim expenses that exceed the lesser of $2,352 or 3% of your net income.
Claiming Your Medical Expenses
To claim your medical expenses, you must file Form T2201, Disability Tax Credit Certificate, with the Canada Revenue Agency (CRA). This form certifies that either you or your dependent has a severe and prolonged impairment that qualifies for the disability tax credit.
After completing Form T2201, you can claim your medical expenses on your tax return either online or by paper. You must keep all receipts and supporting documents for at least six years in case the CRA asks for verification.
Summary
| To Calculate Your Medical Expenses: | To Claim Your Medical Expenses: |
|---|---|
| Determine eligible medical expenses | File Form T2201 with the CRA |
| Subtract reimbursements from eligible expenses | Complete your tax return either online or by paper |
| Choose to claim current year or carry forward expenses | Keep receipts and supporting documents for at least six years |
By following these steps, you can ensure that you are accurately calculating and claiming your medical expense deductions in Canada.
Examples of commonly deductible medical expenses in Canada
One of the biggest concerns for individuals and families in Canada is the cost of medical expenses. Fortunately, the government allows Canadians to claim medical expenses as a deduction on their income tax. If you have incurred medical expenses for yourself, your spouse, or dependents, you may be eligible to claim them as deductions. Here are some commonly deductible medical expenses in Canada:
- Prescription medication: Prescription drugs, insulin, and other medications prescribed by a registered healthcare professional are eligible for deduction.
- Medical devices: Devices like hearing aids, wheelchairs, and crutches are eligible for deduction if they are prescribed by a healthcare professional.
- Medical services: Services such as dental work, physiotherapy, chiropractic treatment, and psychological services can also be claimed as a deduction.
But aside from the common ones, there are also some medical expenses that are not so obvious but still qualify as deductions:
- Travel expenses: If you have to travel outside of your community to receive medical treatment, you can claim expenses such as transportation, accommodation, and meals.
- Home renovations: If you require renovations to your home to make it more accessible due to a medical condition, such as installing ramps or wheelchair lifts, you may be eligible for a deduction.
- Medical supplies: Certain medical supplies such as wound dressings, catheters, and blood glucose test strips may be eligible for a deduction.
Common Deductions and Expenses by Category
Here is a breakdown of some of the commonly claimed medical expenses in Canada:
| Category | Description |
|---|---|
| Prescriptions | Drugs, insulin, and prescribed medications |
| Medical Services | Medical and dental services provided by a licensed practitioner |
| Vision and Hearing Care | Eye exams, glasses, contacts, and hearing aids prescribed by a licensed professional |
| Medical Devices | Medical devices such as wheelchairs, hearing aids, and assistive communication devices prescribed by a licensed professional |
| Medical Expenses Incurred Abroad | Medical expenses incurred abroad, including transportation and accommodations for the patient and an accompanying individual |
| Health Insurance Premiums | Monthly premiums for private health insurance that covers medical expenses not covered by provincial plans |
| Medical Supplies | Medical supplies like catheters, syringes, and wound dressings prescribed by a licensed professional |
| Mobility Assistance | Home modifications such as wheelchair ramps, stairlifts, and grab bars, as well as equipment such as walkers and mobility scooters prescribed by a licensed professional |
| Therapy and Counseling | Counseling and therapy sessions provided by a licensed professional, including physiotherapy, occupational therapy, and chiropractic care |
Remember that deductions for medical expenses vary from case to case, and that it’s always best to consult with a tax professional to determine which deductions you may be eligible for.
Limitations and Restrictions Related to Medical Expense Deductions in Canada
While it is possible to claim medical expenses as a deduction on your Canadian income tax return, there are certain limitations and restrictions that you should be aware of. Here are some of the key things to keep in mind:
- Only eligible medical expenses can be claimed. This includes things like payments to doctors, dentists, and other medical practitioners, prescription medications, and certain medical devices and equipment.
- Expenses that are covered by a private health insurance plan cannot be claimed as a deduction. However, if your insurance plan only covers a portion of the cost, you may be able to claim the remainder of the expenses as a deduction.
- Expenses that are reimbursed by your employer or another organization cannot be claimed as a deduction.
- You can only claim medical expenses that you have paid within a certain time frame. Specifically, you can only claim expenses that were paid during any 12-month period that ends in the tax year you are currently filing for.
- The amount you can claim is based on a percentage of your net income for the tax year. For most individuals, this percentage is 3%.
In addition to these limitations and restrictions, there are a few other things to keep in mind when claiming medical expenses as a deduction in Canada:
If you have a dependent who has a medical condition, you may also be able to claim their medical expenses as a deduction on your tax return. However, you will need to provide proof that you are the primary caregiver for the dependent and that you have paid the expenses yourself.
In general, it is a good idea to keep careful records of all medical expenses throughout the year so that you can accurately claim them as a deduction on your tax return. This includes keeping receipts for all payments made to medical practitioners, pharmacies, and other providers.
By understanding the limitations and restrictions related to medical expense deductions in Canada, you can make sure that you are claiming only eligible expenses and that you are maximizing your tax savings each year.
| Medical Expense | Eligible for Deduction? |
|---|---|
| Prescription Medications | Yes |
| Cosmetic Procedures | No |
| Payments to Medical Practitioners | Yes |
| Medical Devices | Yes, in some cases |
| Reimbursements from Employer | No |
As you can see from the table above, not all medical expenses are eligible for deduction in Canada. By reviewing this list and consulting with a tax professional as needed, you can ensure that you are claiming only those expenses that are allowed by law.
Changes to Medical Expense Deductions in Recent Years in Canada
Medical expenses can be a significant burden on personal finances, and Canadians have long been able to claim tax deductions on their medical expenses. However, changes to the medical expense deduction in recent years have altered what expenses can be claimed. The following are some of the changes that have been made:
- Age limit for dependent children: Prior to 2017, Canadians could claim medical expenses for their dependent children who were under 18 years old. However, since 2017, the age limit has been raised to 21 years old and the children must be dependent on the claimant due to mental or physical infirmity.
- Fertility treatments: Canadians can now claim expenses related to fertility treatments as medical expenses, provided that a medical practitioner has certified that the claimant has a medical condition that results in infertility.
- Medical cannabis: Qualifying patients can now claim medical cannabis as a medical expense. This includes the costs associated with buying cannabis seeds and plants, and production and packaging costs incurred by a licensed producer.
In addition to these changes to the medical expense deduction, it is also important to note that eligible medical expenses must exceed the lesser of $2,397 and 3% of a person’s net income. For example, if a person has a net income of $50,000, they can only claim medical expenses that exceed $1,500.
Below is a table of some of the medical expenses that can be claimed as deductions:
| Eligible Expenses | Notes |
|---|---|
| Ambulance services | Costs associated with ground or air ambulance service |
| Artificial limbs and aids | Costs associated with braces, crutches, wheelchairs, and prosthetic limbs |
| Dental services | Costs associated with basic and major dental services, including orthodontic treatments |
| Eye exams, glasses, and contacts | Costs associated with prescription eyewear or contact lenses |
| Pregnancy tests and fertility treatments | Costs associated with pregnancy tests, fertility medications, and in vitro fertilization (IVF) |
| Prescription drugs and medications | Costs associated with prescription drugs and medications, including medical cannabis purchased from licensed producers |
It is important to keep receipts and documentation for all medical expenses in case of an audit by the Canada Revenue Agency. By keeping accurate records and staying up-to-date with changes to the medical expense deduction in Canada, individuals can maximize their tax savings and minimize the financial burden of medical expenses.
Tips for Maximizing Medical Expense Deductions in Canada
If you are a Canadian taxpayer and you have significant medical expenses, you may be able to deduct these expenses from your taxes. The Canada Revenue Agency (CRA) allows taxpayers to claim medical expenses that exceed a certain amount as a tax credit. However, the rules around claiming medical expenses can be complex, and not all medical expenses are eligible. Here are some tips for maximizing your medical expense deductions in Canada:
- Keep track of your expenses: To claim medical expenses on your taxes, you will need to provide receipts and other documentation that prove the expense was incurred. Make sure you keep track of all your medical expenses throughout the year, including receipts for prescriptions, medical supplies, and appointments with healthcare professionals.
- Claim expenses for yourself and your dependents: You can claim medical expenses for yourself, your spouse or common-law partner, and any dependents (including children) who are under the age of 18. This can include expenses for dental work, prescription drugs, eyeglasses, and other medical supplies.
- Claim expenses for your parents or grandparents: If you are supporting your parents or grandparents and they are dependent on you for their basic needs (such as food, shelter, and clothing), you may be able to claim their medical expenses on your taxes.
Eligible Medical Expenses in Canada
Not all medical expenses are eligible for tax deductions in Canada. The CRA has a specific list of eligible expenses, which includes:
- Prescription drugs and other medications
- Medical devices (such as hearing aids and wheelchairs)
- Medical services (such as dental work and physiotherapy)
- Travel expenses for medical treatment (such as hotel stays and transportation costs)
- Attendant care expenses (such as the cost of a caregiver)
- Medical expenses incurred outside of Canada (in some cases)
Maximizing Your Medical Expense Deduction
If you have significant medical expenses, you may be able to maximize your tax deduction by bundling your expenses. This means you should try to pay for as many of your medical expenses as possible in a single year, so that the total amount you spend exceeds the threshold for claiming the medical expense tax credit. For example, if your total eligible expenses for the year are $1,500, you will only be able to claim a tax credit for expenses that exceed 3% of your net income. However, if you can bundle your expenses and spend $3,000 in a single year, you will be able to claim a bigger tax credit.
| Net Income | 3% Threshold | Maximum Tax Credit |
|---|---|---|
| $30,000 | $900 | $600 |
| $50,000 | $1,500 | $1,000 |
| $100,000 | $3,000 | $2,000 |
It’s also important to remember that you can only claim medical expenses that you have not been reimbursed for. If you have a healthcare plan that covers some or all of your medical expenses, you will need to subtract any reimbursements from your total eligible expenses before calculating your tax credit.
By following these tips and understanding the rules around claiming medical expenses in Canada, you may be able to maximize your tax deduction and save money on your taxes.
FAQs on What Medical Expenses Can You Deduct Canada?
Q1: Can I deduct all medical expenses on my taxes?
A: Unfortunately, not all medical expenses can be deducted on your taxes. Only eligible medical expenses can be claimed.
Q2: What are some eligible medical expenses that I can claim on my taxes?
A: You can claim expenses such as prescription drugs, medical devices, dental work, optometrist visits, and more.
Q3: Can I claim expenses that were reimbursed by my employer?
A: No, you cannot claim expenses that were already reimbursed by your employer or insurance company.
Q4: Can I claim expenses for cosmetic surgeries?
A: No, expenses for cosmetic surgeries that are not deemed medically necessary cannot be claimed.
Q5: Can I claim expenses for alternative therapies?
A: Yes, you can claim expenses for alternative therapies such as acupuncture and chiropractic care as long as they are done by a licensed practitioner.
Q6: Can I claim expenses for travel related to medical treatment?
A: Yes, you can claim expenses for travel related to medical treatment if it was necessary to travel at least 40km (one-way) to receive the treatment.
Q7: How much can I claim for medical expenses on my taxes?
A: You can claim any eligible expenses that exceed the lesser of 3% of your net income or $2,397 (for 2021 tax year).
Thanks for Reading!
Now that you know what medical expenses you can deduct in Canada, make sure to keep all your receipts and documentation organized for tax time. Remember, only eligible expenses can be claimed and there is a limit on how much can be deducted. If you have any additional questions or need clarification, consult with a tax professional. Thanks for reading and be sure to visit again for more helpful tips and information.