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Normandin Beaudry

Non-refundable tax credits for medical expenses

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There, in black and white

NB Bulletin Vol. 8 N. 4, March 2005

This bulletin contains information that could help your employees and their dependents when they are preparing their federal and provincial income tax returns.

The main points taxpayers should know about non-refundable tax credits for medical expenses when filling out their tax returns are as follows:

  • Eligible medical expenses must be indicated on the following lines:
    • Lines 330 and 331 (as the case may be) of the federal tax return;
    • Line 381 of the provincial tax return for residents of Quebec;
    • Line 5868 of the provincial tax return for residents of the other provinces and territories (except the Yukon).
  • Tax payers can claim tax credits for eligible medical expenses which they or their spouse paid for themselves, their spouse or a dependent.
  • The expenses must have been paid during a period of 12 consecutive months ending in 2004 and they must not have been used in calculating a tax credit in a previous year’s return.
  • Taxpayers cannot claim tax credits for the portion of eligible expenses for which they have been reimbursed or which are reimbursable, unless the amount reimbursed was included in their income (for example, as a taxable benefit on a T4 slip).
  • To be eligible, the total expenses must exceed the following amount:
    • For all tax returns other than Quebec, the lesser of:
      • 3% of net income (line 236 of the federal tax return); or
      • A fixed amount, which is: $1,813 federally and in Saskatchewan, Nunavut and the Northwest Territories, $1,865 in Alberta, $1,772 in British Columbia, $1,678 in Prince Edward Island, $1,728 in Manitoba, $1,755 in New Brunswick, $1,637 in Nova Scotia, $1,821 in Ontario and $1,614 in Newfoundland and Labrador.
  • For the Quebec tax return: 3% of family income (sum of the amounts on line 275 of the provincial tax returns of the taxpayers and their spouse, if applicable).

Eligible medical expenses

Following are a few examples of eligible medical expenses (note that maximums may apply):

  • Deductible, co-insurance or other medical expenses not reimbursed by insurance plans;
  • Payments made to a doctor, dentist, nurse or certain other medical practitioners;
  • Payments made to a public hospital or private licensed hospital;
  • Premiums paid to a private health insurance plan. Only residents of Quebec may include premiums paid by an employer (box J of the RL-1 slip or box B of the RL-22 slip);
  • Premiums paid to the Quebec Prescription Drug Insurance Plan (line 447 of the 2003 provincial tax return), but not premiums paid to a government health or hospitalization insurance plan;
  • Payments for eyeglasses, contact lenses or other devices for the treatment or correction of a visual disorder prescribed by a physician or optometrist;
  • Amounts paid to purchase drugs prescribed by a doctor or to obtain an artificial limb, a wheelchair, crutches or a hearing aid.

For more information regarding eligible medical expenses, consult Interpretation Bulletin IT-519R2 "Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction" issued by the Canada Revenue Agency. For residents of Quebec, consult the brochure "Medical Expenses (IN-130)" issued by the provincial government. You can find these two documents on the Web sites mentioned below.

The information in this bulletin does not constitute an official opinion for tax purposes. For more information regarding tax returns, please consult a tax professional or visit the Canada Revenue Agency Web site at www.cra-arc.gc.ca or the Ministère du Revenu du Québec Web site at www.revenu.gouv.qc.ca 
 

 

Please feel free to contact us for additional information.

514.285.1122
 
630, René-Lévesque Blvd. West, 30th floor
Montreal, Quebec, H3B 1S6