Medical Expense Deductions
By Nizam Shajani, CPA, CA, MBA
Documentation of your medical expense claims are important to support your claims. While this could be a significant non-refundable credit, CRA does often request support for this claim.
Whose expenses can you claim?
You can claim medical expenses that are eligible that you or your spouse or common-law partner paid for. These expenses should be for yourself, your spouse or common-law partner or your children (under the age of 18).
You may also be able to claim eligible medical expenses that you or your spouse or common-law partner paid for other persons dependent on you for support – such as adult children, grandchildren, parents, grandparents, siblings, aunts, uncles, nieces or nephews.
What can you claim?
Expenses that can be claimed must be eligible medical expenses (details noted on CRA’s website) and for the most part, these expenses do not have to have been paid in Canada. However, they should not have been reimbursed or reimbursable – unless the reimbursement is included in your income (i.e. it is included in your T4 slip).
Private health services plans may also be deductible as eligible medical expenses if substantially all (more than 90%) of the premiums paid relate to medical expenses that are eligible for the medical expense tax credit. Note this is not the case for all private health providers.
Where can you incur the expense?
Eligible medical expenses are not restricted to those paid in Canada or for medical services provided in Canada. There are some exceptions such as attendant care, and group homes that are required to be in Canada.
When can you claim?
Consider that any 12-month period ending in the year of filing can be used to calculate the deduction, as long as the amount was not claimed in the previous year. As such, if the calculation does not net a deduction in the current year or your income is anticipated to decrease next year – it may be worth saving the expenses for a larger deduction in the following year.
How much can you claim?
The amount you can claim in 2019 is calculated based on the amount spent less 3% of your net income or $2,352. Additional provincial deductions are also available. Due to the deduction from the amount spent – it may be better for the spouse with the lower income to claim the deduction.
This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. © 2020 Shajani LLP