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Normandin Beaudry

Tax credit for medical expenses

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There, in black and white

NB Bulletin Vol. 15 N. 5, February 2012

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. Quebec residents can also include, in 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.

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 2011. Medical expenses paid in 2010 can thus 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 2010 tax return and must have been paid on or before December 31, 2011.

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 depending on 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, was previously applied for each dependent. Beginning this year, fees incurred by dependents are no longer subject to a maximum federally and in most provinces.

We invite you to read the next section to learn about aspects specific to each province, especially in regard 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. Therefore, it is important to always consult the appropriate income tax guide.

For example, the threshold to qualify for a tax credit in 2011 (see B in the previous section) is $2,052 federally and varies between $1,637 and $2,194 provincially. Although expenses incurred by dependents are no longer subject to a maximum federally or in most provinces, a maximum continues to apply in some provinces including British Columbia ($10,000) and Ontario ($11,107)

Tax credit calculation in Quebec

Unlike elsewhere in Canada, in Quebec, a single tax credit calculation applies to the taxpayer and all eligible dependents.

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.


(1) Lines 330 and 331 of the federal tax return, line 381 of the Quebec tax return and lines 5868 and 5872 of the other provincial tax returns.

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.revenuquebec.ca.

 

Please feel free to contact us for additional information.

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