Non-refundable tax credits for medical expensesLinkedIn
There, in black and white
Bulletin NB Vol. 11 N. 1, February 2008
Once again this year, Normandin Beaudry is informing Canadian taxpayers about non-refundable tax credits for medical expenses that can be claimed on income tax returns. This document is a complement to our March 2005 bulletin (Vol. 8, No. 4). As with the Information Bulletins issued in previous years, this bulletin presents the annual updates applicable to the parameters used to calculate the tax credit. It also highlights the key changes that will impact expenses that qualify for this tax credit.
Modifications to eligible expenses
The Ministère du Revenu du Québec amended section 7 of its reference document, which deals with transportation and travel expenses. Reasonable expenses incurred for operating a vehicle now qualify as medical expenses if the transportation service is not readily available. The distance to travel to obtain medical services unavailable within the locality where the patient lives must be at least 40 kilometres.
No other major changes have been made to the federal and provincial lists of eligible medical expenses that were used for 2006 tax returns. Minor changes, introduced only to facilitate understanding, have been made to some portions of the Quebec reference document.
Some examples of eligible medical expenses are listed in our bulletin issued in March 2005 (Vol. 8, No. 4). Please visit the websites mentioned at the end of this bulletin for a complete list of eligible expenses.
Federal Tax Return and Provincial Tax Return - provinces other than Quebec
Taxpayer, spouse and dependent children under 18 years of age
To qualify for a tax credit, the total eligible medical expenses must exceed the lesser of the following amounts:
Because net income is determined individually for each spouse both federally and provincially, it may be advantageous to claim all of the eligible medical expenses on the tax return of the spouse with the lower net income.
(line 331 of the federal tax return, line 5872 of the provincial tax return)
You can also claim a tax credit for medical expenses paid by yourself or your spouse for the following individuals, provided that the individuals are your dependents or the dependents of your spouse:
Unlike the calculation in the previous section, a separate calculation must be done for each of these dependents, using the particular dependent's net income. An example illustrating the calculation method is provided on page 44 of the federal General Income Tax and Benefit Guide.
It is important to note that the maximum credit for each dependent is $10,000 at the federal level and varies at the provincial level based on the province of residence. Thus, the maximum credit for New Brunswick and the Northwest Territories is $5,000, the maximum for Alberta is $10,577 and the maximum for Ontario is $10,435. The maximum credit for all other provinces is $10,000.
Provincial Tax Return - Quebec
A single tax credit calculation applies to all eligible dependents, as described above for lines 330 and 331 of the federal tax return.
To qualify for a tax credit, the total eligible medical expenses must exceed 3% of the family income. Family income is defined as the sum of the amounts on line 275 of the taxpayer's and the spouse's tax returns. Thus, unlike the federal tax return, there is no tax benefit in claiming all of the medical expenses on the tax return of the spouse with the lower income.
Please note that the information presented in this bulletin does not constitute an official opinion for tax purposes. For more information on tax returns, please consult a tax professional or visit the following government websites:
Please feel free to contact us for additional information.
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