Non-refundable tax credits for medical expensesLinkedIn
There, in black and white
NB Bulletin Vol. 13 N. 2, March 2010
Subject to certain eligibility criteria, a tax credit of between 4% and 20% of the incurred expenses can be granted to the taxpayer. It is important to note that, unlike some other tax credits, credits for medical expenses are non-refundable. Therefore, credits in excess of the amount of income tax to be paid are not reimbursed.
Below are a few examples of eligible medical expenses (maximums may apply). Please note that tax credits cannot be claimed for the portion of eligible expenses that is reimbursed through an insurance plan.
For a complete list of eligible 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. These documents are available on the websites listed at the end of this bulletin.
Taxpayers can claim tax credits for eligible medical expenses for themselves and their dependents, i.e. individuals that they supported and that lived with them or were dependent on them because of an infirmity. A dependent can be the child, parent, or spouse of the taxpayer, or almost any other individual related to the taxpayer.
To qualify as eligible expenses, the medical expenses must have been paid during a period of 12 consecutive months ending in 2009. Therefore medical expenses paid in 2008 can qualify as long as the time between the payment date of the first expenses claimed and the payment date of the last expenses claimed does not exceed 12 months. Any expenses submitted for a tax credit must not have been used in calculating the 2008 tax return and must have been paid on or before December 31, 2009.
To qualify for a tax credit, the total eligible medical expenses must typically exceed the lesser of the following amounts:
(A) 3 % of the taxpayer's net income for the tax year; or
We invite you to read the next section to learn about aspects specific to each province, especially in regards to the Quebec tax return for which calculations vary more significantly.
Also, please note that a maximum credit, which also varies according to the government authority and province of residence, normally applies for each dependent
Aspects specific to the province
As mentioned above, some aspects pertaining to eligible expenses and the tax credit calculation are specific to the taxpayer's province of residence. Thus, it is important to always consult the appropriate income tax guide.
For example, the threshold to qualify for a tax credit in 2009 (see B in the previous section) is $2,011 federally and varies between $1,637 and $2,168 provincially. The maximum credit granted for each dependent is $10,000 federally and varies between $5,000 and $11,473 provincially.
Tax credit calculation in Quebec
Unlike elsewhere in Canada, a single tax credit calculation applies to the taxpayer and all eligible dependents in Quebec.
There is no maximum credit for each dependent and, to qualify for a tax credit, the total eligible medical expenses must exceed and 3% of the family income. Thus, in Quebec, there is no tax benefit in claiming all of the medical expenses on the tax return of the spouse with the lower income.
The information presented 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 website at www.cra-arc.gc.ca or the Ministère du Revenu du Québec website at www.revenu.gouv.qc.ca.
(1) Lines 330 and 331 of the federal tax return, line 381 of the provincial tax return for residents of Quebec and lines 5868 and 5872 of the provincial tax returns for residents of other provinces.
Please feel free to contact us for additional information.
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