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Normandin Beaudry

Tax credit for medical expenses

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There, in black and white

NB Bulletin Vol. 14 N. 3, March 2011

Subject to certain eligibility criteria, a tax credit of between 4% and 20% of the incurred expenses can be granted to the taxpayer(1).

Eligible expenses

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.

  • Deductible, co-insurance or other medical expenses not reimbursed by insurance plans
  • Payments made to a medical doctor, dentist, nurse or certain other medical professionals
  • Payments made to a public or licensed private hospital
  • Premiums paid by the taxpayer to a private health services plan for health and dental care insurance coverage. Furthermore, Quebec residents can include to their provincial income tax return, premiums paid by the employer (box J of the RL-1 slip or box B of the RL-22 slip)
  • Payments for eyeglasses, contact lenses or other devices prescribed by a physician or optometrist for the treatment or correction of a visual disorder
  • Amounts paid to purchase drugs prescribed by a physician or to obtain an artificial limb, a wheelchair, crutches or a hearing aid

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.

Expenses incurred for purely cosmetic procedures

On March 4, 2010, the federal Minister of Finance announced that expenses for purely cosmetic procedures are no longer eligible for the medical expense tax credit. Expenses related to liposuction or teeth whitening, for example, are no longer eligible. However, expenses incurred before March 5 but paid on a later date and expenses for cosmetic procedures required for medical or reconstructive purposes will continue to qualify for the tax credit.

Eligibility criteria

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
(B) An amount that varies according to the government
authority and province of residence

It is important to note that credits in excess of the amount of income tax to be paid are not reimbursed (Non-refundable credits).

Please note that a maximum credit, which also varies according to the government authority and province of residence, normally applies for each dependent.

We invite you to read the next section to learn about aspects specific to each province, especially in regards to the Quebec tax return.

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 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.

 

Please feel free to contact us for additional information.

514.285.1122
 
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Montreal, Quebec, H3B 1S6