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Several medical expenses are eligible for a tax credit. Here are a few Canadians should consider at tax time.
Whether you do your own taxes or enlist professional help, you want to avoid leaving money on the proverbial table. Yet, a number of medical expenses are commonly overlooked by taxpayers when filing their tax returns.
Medical expenses may be eligible for a federal non-refundable tax credit on your tax return. To be eligible, expenses must exceed a limit of 3% of your net income, subject to a maximum threshold of $2,397 for 2020 (applies to income of $79,900 and above). Provincial and territorial non-refundable tax credits have maximum thresholds ranging from $1,637 to $2,503.
Here are some common medical expenses you may be able to claim on your 2020 income tax return:
Premiums you pay for medical and dental plans, as well as the out-of-pocket (co-pay) portion of medical expenses submitted to the plan are eligible. Premiums paid by payroll deduction may be reported on your T4 slip in the “other information” section in box 85 or on your final pay stub for the year.
For those with celiac disease, the incremental cost of gluten-free products for that person (not their whole family) is a medical expense. The eligible expense is the product cost minus the cost for a comparable product with gluten, so takes a bit of work to calculate.
The cost of driving or taking public transportation to obtain medical services is eligible, if the required travel is at least 40 kilometres one way. In order to qualify, substantially equivalent services must not be available closer to your home.
For a person who has a severe and prolonged impairment of their mobility, up to $2,000 for a move to housing that is more accessible or allows them to be more functional or mobile is eligible. The provincial limit is $2,982 for Ontario residents.
Medical services provided outside Canada, including amounts paid to a medical practitioner at a public or private hospital may qualify.
Costs for a school that has special staff, facilities or equipment that is necessary due to a child’s physical or mental impairment may qualify. A medical practitioner or the principal must certify the need.
A tutor’s services for someone with a learning disability or impaired mental function can be claimed if the expense is paid to someone not related to the person. A medical practitioner must certify in writing that the services are necessary.
The costs must relate to changes that give someone better mobility or functioning within their home due to a severe and prolonged impairment in their mobility. The costs must be reasonable, not normally incurred by someone with normal physical development, and not normally expected to increase the value of the home.
Specifically, the cost of installing an electric or sealed combustion furnace to replace a furnace that is neither of these, due to a taxpayer’s severe chronic respiratory ailment or immune system disorder, may be permitted.
Some common expenses that do not qualify are:
For more information about eligible medical expenses you can claim on your tax return, the Canada Revenue Agency provides a list of common medical expenses here.
Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell any financial products whatsoever.
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Interesting that the cost of replacing a furnace is considered a medical expense for someone with respiratory problems. Does that also extend to the cost of radon remediation systems? In 2020, we spent over $3,000 on a radon remediation system for our home. Our radon readings prior to the installation of the equipment was more than double the Canadian safety standard allowable exposure. Radon gas is the leading cause of lung cancer in non-smokers.
Can I deduct as a medical expense the $3,000 cost to install a radon remediation system?
Thanks for the question. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
In February 2020, while on vacation in Mexico, I suffered a stroke & was hospitalized for 2 days before being released and requested to return to Canada immediately.
Although I had out of country medical insurance there was a deductible and I also suffered a ‘currency conversion’ loss between the amount I paid for my hospitalization and the insurance refund. Can I claim either/both the deductible & the currency exchange loss as medical expenses on my tax return?
Thank you for the question. We invite you to email your question to [email protected], where it will be considered for a future response by one of our expert columnists. For personal advice, we suggest consulting with your financial institution or a qualified advisor.
I have to have a lower molar replaced, can I claim this expense? thank you
Can I deduct the cost of an MRI (private clinic) on my taxes?