Although the majority of Canadians are covered by our universal healthcare system, there are still some out-of-pocket expenses that aren’t covered. Every year, many taxpayers miss out on valuable tax deductions and credits simply because they’re not aware of them.
In 2023, 31,846,782 taxpayers filed a return, many of them claiming medical expense deductions. From routine deductions to lesser-known ones, understanding what you can claim can make a noticeable difference to your tax bill (or refund).
Below, I’ll dive into the specifics and outline several ways that you can maximize your return and get credit for out-of-pocket medical expenses tax deductions.
Claiming Medical Expenses On Your Tax Return
Tax Day is the deadline that all income tax returns must be filed in Canada, and usually falls on April 18th of each year.
For many, the process is straightforward, especially if you just have one job and provide for yourself. However, the more responsibilities you begin to take on, the more expensive life can get.
From taking care of a family to your own physical health, the Canada Revenue Agency (CRA) offers a wide range of tax deductions and credits you can claim to help reduce your tax burden and make life more affordable.
The CRA defines medical expenses as payments made to a medical practitioner, dentist, or nurse, or payments for specific treatments or devices. It’s not a free-for-all, though. These expenses must be for yourself, your spouse or common-law partner, or your dependent children under 18 years old.
- Related Reading: 30 Useful Tips To Pay Less Tax In Canada
This category of tax deduction covers a wide range of expenses, ranging from dental services to travel expenses for medical treatment.
However, to be deductible, these expenses must not be reimbursed by an insurance plan or other programs.
The calculation for this tax credit is a bit nuanced, though. You can claim the total eligible medical expenses minus either 3% of your net income or $2,479, as specified by the CRA, whichever is less.
It’s essential to keep thorough records.
Receipts for all claimed expenses should be kept, as the CRA may request them for verification purposes. This means that you shouldn’t be guessing or “rounding up” expenses that you’re attempting to deduct.
If the CRA asks for records and you’re unable to provide them, you could end up in hot water. In the best-case scenario, the expense won’t be deducted. In the worst-case scenario, you could be penalized by the CRA for lying to them.
Common Eligible Medical Expenses
First, let’s start by going through some of the most common medical expense tax deductions that the CRA allows you to claim.
1. Prescription Drugs and Medications
Prescription drugs and medications can weigh heavily on your wallet, but they’re often eligible for tax deductions. The catch? They must be prescribed by a medical professional and not be over-the-counter purchases.
Keep those prescriptions and receipts handy, as they’re your ticket to claiming these expenses.
2. Dental Services
Not just any trip to the dentist qualifies. Dental services for tax deductions must be more than just cosmetic. Think of medically necessary procedures like fillings to root canals.
Remember, regular teeth whitening or cleaning won’t make the cut.
3. Vision Care
Being able to see properly is important. Thankfully, your glasses and contact lenses are tax deductible. As long as they’re prescribed, most vision care expenses are eligible. This includes eye exams and even laser eye surgery.
4. Medical Services Outside Canada
Did you receive medical treatment while abroad? You can often claim these expenses. As long as these medical services are the kind you’d normally get in Canada and you’ve kept detailed records and receipts, you can claim most out-of-country medical expenses.
5. Travel Expenses for Medical Treatment
Travelling for medical treatment can be expensive, especially if you’re travelling to another province to see a specialist. If you travel more than 40 kilometres for medical services, those expenses can be claimed. Keep a log of your travel details and tickets to make claiming easier.
6. Attendant Care Expenses
Costs for an attendant can be claimed, provided the attendant performs personal care tasks and you have a written certification from a medical practitioner.
7. Medical Equipment and Devices
A variety of medical equipment and devices, from wheelchairs to breathing apparatus, are deductible. These items must be prescribed and necessary for your care, though. If you simply purchased them over-the-counter without an official recommendation, they’re not deductible.
8. Physical Therapy
Physical therapy expenses are deductible when prescribed. Short and long-term physical therapy routines are often required after sustaining an injury or undergoing major surgery. Sometimes, universal healthcare doesn’t cover all of these costs.
9. Mental Health Services
Your mental health and well-being are as important as your physical health. Therapy and counselling services, when prescribed, are eligible for tax deductions.
Lesser-Known Deductible Medical Expenses
Now, let’s take a look at some of the lesser-known medical expenses that you can claim as deductions on your next tax return.
10. Air Quality Improvement Devices
Expenses for air purifiers or air conditioners may be deductible when prescribed for severe chronic respiratory ailments or immune system disorders. This inclusion recognizes the importance of air quality in managing certain health conditions.
11. Gluten-Free Products
For those with celiac disease, the cost difference between gluten-free and regular products can be claimed. Keep those grocery receipts and a doctor’s note to confirm the medical necessity.
12. Service Animals for Disabilities
Costs associated with buying, training, and caring for a service animal are deductible. This includes animals trained to assist with severe diabetes, blindness, or other major disabilities. Unfortunately, it does not cover emotional support animals.
13. Water Filter or Purifier
If prescribed for a specific medical condition requiring filtered water, the expenses for water filter systems can be claimed.
14. Home Care Services
If you require home care services due to a medical condition, these expenses can be deductible. This could include a full-time nursing service or a part-time nurse who checks in on you a few times per week.
15. Academic Tuition for Learning Disabilities
Often, those with learning disabilities require special education resources and tools. The costs associated with schools that provide specialized equipment, facilities, or personnel for a person with a learning disability can be claimed as a deduction.
16. Cosmetic Surgery (In Certain Cases)
While cosmetic surgeries are generally not deductible, if they’re necessary for medical or reconstructive purposes, they can be. This means that procedures related to post-accident or illness recovery will be covered, but enlargements or purely-cosmetic skin treatments likely won’t be.
17. Transportation and Travel for Medical Services
In certain situations, expenses for transportation and travel to obtain medical services or visit a doctor who’s not available locally can be claimed. This is especially prevalent for those who live in isolated regions of the country.
18. Renovation or Construction Expenses
Expenses incurred for renovations or alterations to a home for a person with a severe and prolonged mobility impairment may be deductible. This includes modifications that enable accessibility and independent living, such as building a ramp leading to your front door.
Expenses for Dependents and Family
Finally, let’s take a look at common medical expense tax deductions you can claim for your dependents and family.
19. Childcare Expenses
Costs for childcare services, particularly for children with physical or mental impairments, are deductible. This provides financial relief for families managing extra care needs.
20. Dependent Adult Medical Expenses
Medical expenses for a dependent adult, such as an elderly parent, can also be claimed. This includes a range of medical costs, from prescription medications to mobility aids.
21. Medical Expenses for a Spouse or Common-Law Partner
If you pay for medical expenses for your spouse or common-law partner, these costs can often be claimed. This supports families where one member may have significant medical needs.
22. Attendant Care for Family Members
The cost of attendant care for family members who are dependent due to a disability can be deductible. This can include a range of care services such as nursing and home care.
How to Claim Medical Expenses on Your Tax Return
Claiming medical expenses on your tax return in Canada is fairly straightforward:
- Start by gathering all of your receipts for eligible expenses and totalling them up.
- On your tax return, you’ll enter this amount on line 33099 of your T1 income tax return if the expenses are for yourself, your spouse, or your dependent children under 18.
- For other dependents, use line 33199.
Remember, you’re claiming the amount that exceeds the lesser of 3% of your net income or the CRA’s specified threshold.
Conclusion – Maximizing Your Medical Expense Deductions
If you want to maximize your medical expense deductions and reduce your overall tax liability, the best thing you can do is save all of your receipts. In addition to saving the physical copies, it may also be a good idea to take digital photocopies/scans so you can back them up online.
Today, most CRA-approved tax-filing software makes it simple to claim all of your eligible medical expenses deductions.
Keep on reading to see my list of the best free tax-filing software in Canada!
