Are you leaving money on the table? As a rule of thumb, under the Canadian Income Tax Act, certain medical expenses incurred for yourself, your spouse or common-law partner, and your children under 18 years or specific dependents qualify for the medical expense tax credit.
By Mayur Gadhia, CPA, CA
Here are a few tips to help you along:
•You can only claim the part of the eligible medical expense that has not been reimbursed in any other way during a selected 12-month period.
•You can claim for a dependent, who might be a child, grandchild, parent, grandparent, brother, sister, uncle, aunt, niece, nephew or your spouse or common-law partner.
•The CRA allows you to claim most acceptable medical expenses incurred outside of Canada (with some exceptions, such as attendant care or a group home outside of the country).
•Total 2018 qualifying medical expenses must first be reduced by 3% of your net income or $2,302, whichever is less. The remaining amount is used to determine the tax credit.
These expenses are eligible for a medical tax credit:
•Payments to authorized medical practitioners such as physicians, dentists or nurses for medical, dental and other medical-related services.
•An air conditioner purchase of $1,000 or 50% of the amount paid, whichever is less, is an eligible medical expense. Normally, a person with a severe chronic ailment, disease or disorder can make the claim, although a prescription is required.
•Dentures and dental implant can be claimed without any certification or prescription.
•The amount paid for an electric or sealed combustion furnace bought to replace a furnace that is neither of these, where the replacement is required because of a person’s severe chronic respiratory ailment or immune system disorder, can be claimed. Again, you’ll need a prescription to make this claim.
•Medical marijuana costs are eligible when the substances are purchased in accordance with the “Access to Cannabis for Medical Purposes Regulations” or section 56 of the Controlled Drugs and Substances Act.
These expenses are not eligible for a medical tax credit:
•Amounts paid for gym, athletic or fitness club fees, blood pressure monitors, cosmetic surgery, over-the-counter medications, vitamins and supplements, or organic food, and premiums paid for provincial and territories health plans.
This article is a generic overview. Talk to a qualified tax professional to discuss the tax implication based on your specific circumstances. The full list of qualifying and non-qualifying medical expenses is available at Canada Revenue Agency’s website.
Mayur Gadhia, CPA, CA, is the Founder of CloudAct CPA Professional Corporation, a cloud-based firm providing taxation, accounting and business advisory services.