What It Is
The medical expense tax credit is a non-refundable tax credit that allows you to reduce the income tax you owe. It covers a wide range of medical expenses for you, your spouse or common-law partner, and your dependent children under 18.
Eligible Expenses
- Medical Expenses: Includes costs not covered by insurance such as dental services, prescription drugs, and vision care.
- Disability-Related Expenses: Expenses for those who need therapy, including devices and certain renovations made to your home to make it more accessible.
- Travel Expenses: If you had to travel at least 40 kilometers (one way) to receive medical treatment, you might be able to claim travel expenses.
How to Claim
- Gather Documentation: Keep all receipts for medical expenses paid for any 12-month period ending in 2023. Documentation should clearly show the service date and the payment made.
- Calculate Your Credit: The medical expense tax credit is calculated as 15% of your eligible medical expenses that exceed the lesser of $2,635 or 3% of your net income.
- Claim the Credit: Total medical expenses for you, your spouse or common-law partner and your dependents can be entered onto line 33099 of your tax return. Using the formula above, you will calculate the medical expense tax credit to be included in line 33200.
Considerations
- Review Eligibility: The list of eligible expenses is extensive and updated regularly. Check the Canada Revenue Agency (CRA) website for the most current information.
- Forgetting to Claim Travel Expenses: If you travel more than 40 km (one way) for medical treatments, these expenses can add up. Keep a detailed log of your trips, including parking, and accommodation.
- Overlooking Supporting Documents: The CRA may request documentation to support your claim. Keep all receipts and prescriptions in a safe place for at least six years.
Conclusion
Leveraging the medical expense tax credit can reduce your tax burden, especially if you or your family have had substantial medical expenses throughout the year. By keeping thorough records and understanding the eligible expenses, you can maximize your benefits. Always consider consulting with a tax professional to ensure you’re taking full advantage of this and other tax credits.
