While health care in Canada is publicly funded, there are various out-of-pocket medical expenses that taxpayers incur on a daily basis. Examples include over-the-counter medications, eyeglasses, vitamins and other items not covered by provincial or private health insurance. What many taxpayers do not know is that certain health expenses are tax deductible. This leads to taxpayers not keeping tax receipts for expenses they could be otherwise claiming.
CRA Medical Expenses
The CRA has a large list of health care expenses that are accepted as being tax deductible. This list can be found directly on the CRA website here. Some examples include assisted breathing devices, laser eye surgery, dental visits, braces for a limb, among many others. The cost of any health care expense that appears on the CRA’s list can be claimed on a taxpayer’s tax return.
As a reminder, for all expenses, a taxpayer can only claim the portion of the expense that the taxpayer or the person they are claiming the expense for, will not otherwise be reimbursed for. Alternatively, an expense can be claimed if the reimbursement is included in the taxpayer’s, or the other person’s income, and the reimbursement was not deducted somewhere else on the income tax and benefit return.
CRA Non-Medical Expenses
The CRA also has a long list of health care expenses that are not claimable. It is important the taxpayer ensures they review whether the expense is on the claimable list before claiming. Examples of non-claimable expenses include organic food, non-prescription birth control or similar devices, personal response systems, among various others. Again, it is imperative that you review the CRA’s list of allowable expenses before claiming them.
CRA Medical Expenses and Health Care Premiums
For many Canadians, health care premiums are often a question when it comes to medical expenses. Health care premiums paid to private health service plans are tax deductible medical expenses. Taxpayers can claim health care premiums paid to plans that offer a wide variety of benefits, including medical, hospital and dental visits.
Claiming CRA Medical Expenses on Tax Returns
The Canada Revenue Agency (the “CRA”) is fairly flexible about the length of time you can claim medical expenses. You do not necessarily need to claim medical expenses incurred between January 1st and December 31st of said year.
A taxpayer can claim eligible medical expenses on their tax return if incurred during any 12-month period, as long as it ends in the current tax year, and the taxpayer did not already claim the expenses in another tax year. As a general rule, a taxpayer can claim all amounts paid, even if they were not paid in Canada. As a strategy, taxpayers should consider choosing the 12-month period with the highest medical expenses to maximize their deduction.
This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in this article. If you have specific legal questions you should consult a lawyer.