If you have paid medical expenses for yourself or your dependents, you may be able to claim them on your personal tax return. However, not all medical expenses are eligible, and there are some rules to follow. Here are some tips on how to organize your medical expenses for claiming on your tax return.
- You need to determine the total amount of eligible medical expenses that you paid in the tax year. Eligible medical expenses include payments to medical practitioners, dentists, nurses, pharmacists, and other health care providers, as well as prescription drugs, dental care, vision care, hearing aids, and more. You can find a complete list of eligible medical expenses on the Canada Revenue Agency (CRA) website. (https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/lines-33099-33199-eligible-medical-expenses-you-claim-on-your-tax-return.html#mdcl_xpns)
- As part of preparing your personal tax return, the amount that you can claim as a tax credit will be calculated. The medical expense tax credit is a non-refundable tax credit that reduces your federal and provincial taxes payable. The amount of the credit is based on a percentage of your eligible medical expenses that exceed a certain threshold. For 2023, the threshold is the lesser of 3% of your net income or $2,635. You can claim the credit for yourself, your spouse or common-law partner, and your dependent children under 18 years of age. You can also claim the credit for certain other dependents, such as your parents, grandparents, siblings, aunts, uncles, nieces, or nephews, if they depended on you for support and their net income was below a certain amount.
- Plan to keep all the receipts and documents that support your claim. You do not need to send them with your tax return, but you must keep them in case the CRA asks to see them later. You should also keep a record of the names and relationships of the persons for whom you paid medical expenses, and their net income if they are not your spouse or child.
Claiming medical expenses on your tax return can help you reduce your taxes payable. However, it can also be complicated and time-consuming. Please reach out to your accountant if you have further questions.