Claiming Medical Expenses
Claiming Medical Expenses on your Tax Return
There are a variety of medical expenses that you can claim on your annual income tax return. The expenses are claimed as non-refundable credits, so the intent is that they reduce your taxable income. You do not get the money back.
There are a variety of services and products that are eligible for deduction. Some require a prescription, some do not. Some require a receipt, while others require you to calculate an amount based on a rate (e.g. travel expenses related to appointments). A complete list of eligible expenses can be found here.
How much can you claim:
You can claim your medical expenses if the total amount of eligible expenses exceeds either (a) 3% of your reported net income or (b) a fixed amount set for that tax year. Whichever is less. For example, if your net income for the year was $30,000, 3% of that would be (a) $900; the (b) set amount by CRA that year was $2,200. You would choose the lesser amount - $900 – and see if your medical expenses exceeded that amount. If they did, you would include them in your tax return.
How to track your expenses:
The easiest way to track your expenses is to keep a record book where you can write down each expense and place receipts. You can also request a statement of payments from your insurer, which will show the portion you may have paid in copayments. Another option is to ask your pharmacy for a printout of the prescription charges you had in a given tax year. Make sure the printout shows what YOU paid, and what your drug plan paid.
It is also helpful to track the number of kilometres you travel to and from appointments. You must live more than 40km away from the physician office or place of treatment. The number of kilometres travelled can be claimed without receipts or proof of appointments, although the CRA could ask for this information later. There are apps that can help you track the number of kilometres travelled (e.g. MileIQ, MileageTracker). Most cancer patients use the simplified method for claiming their travel expenses on their tax return. With this method, you calculate the total kilometres travelled by a km rate for that province or territory. A table of rates can be found here.