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Normandin Beaudry

2017 tax credit for medical expenses

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There, in black and white

NB Bulletin Vol. 21 No. 4, February 2018

For the 2017 tax year, Canadian taxpayers could be entitled to a tax credit ranging from 4% to 20% of medical expenses(1) incurred for themselves or their dependants. The credit is subject to certain conditions and depends on the province or territory of residence.

Compared to 2016, the only modifications to the tax credit calculation are the minimum threshold to qualify for a tax credit in certain provinces and territories, the tax credit rate increase in Newfoundland and Labrador and the tax credit rate decrease in Saskatchewan. Eligible expenses remain unchanged.

To consult the information bulletin published by Normandin Beaudry in 2017, click here.

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 reimbursed through an insurance plan.

  • Deductibles, co-insurance or other medical expenses not reimbursed by insurance plans
  • Payments made to a physician, dentist, nurse or certain other medical professionals
  • Payments made to a public hospital 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 premiums paid by the employer on their provincial income tax return (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 Document RC4065 "Medical Expenses 2017" issued by the Canada Revenue Agency. For Quebec residents, consult Brochure IN-130"Medical Expenses" issued by the provincial government.

Eligibility criteria

Taxpayers can claim tax credits for eligible medical expenses for themselves and for their spouse and their dependent children under 18 years of age. If applicable, taxpayers may also include medical expenses for their other dependants, i.e. individuals that they supported and who lived with them, or were dependent on them due to a disability. Such a dependant can be a child aged 18 years or older, a parent or almost any other individual related to the taxpayer.

To be eligible, the medical expenses must have been paid during a period of 12 consecutive months ending in 2017. Medical expenses paid in 2016 can thus qualify as long as the time between the payment of the first expenses claimed and the payment date of the last expenses claimed does not exceed 12 months. Expenses submitted for a tax credit must not have been used in the 2016 tax return and must have been paid no later than December 31, 2017.

To qualify for a tax credit, the total eligible medical expenses must typically exceed the lesser of the following:

(A) 3% of the taxpayer's net income for the tax year
or
(B) an amount that varies depending on the government authority and the province or territory of residence

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

We invite you to read the next section to learn about features specific to each province and territory, especially Quebec.

Specific features by province and territory (excluding Quebec)

At the federal level and in the rest of Canada, excluding the province of Quebec, taxpayers must declare their medical expenses separately (including medical expenses for their spouse and dependent children under 18 years of age), and their medical expenses for other eligible dependants. The total eligible medical expenses for other dependants must therefore exceed the lesser of the above-mentioned amounts (A or B); amount A therefore corresponds to 3% of each dependant's net income.

Other aspects pertaining to eligible expenses and the tax credit calculation are specific to the taxpayer's province or territory 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 2017 (see (B) in the previous section) is $2,268 at the federal level and varies between $1,637 and $2,415 in the provinces and territories. Although expenses incurred by dependants other than the spouse and dependent children under 18 years of age are no longer subject to a maximum at the federal level and in most provinces and territories, a maximum continues to apply in Ontario ($12,409) and in the Northwest Territories ($5,000).

Moreover, medical expenses used to calculate the amount claimed for medical expenses on a taxpayer's tax return cannot be used on the spouse's tax return. Please note that it may be advantageous to claim all medical expenses on the tax return of the spouse with the lower income.

Quebec tax credit calculation

Unlike elsewhere in Canada, in Quebec, a single tax credit applies to the taxpayer and all of his or her eligible dependants.

To qualify for a tax credit, the total eligible medical expenses must exceed 3% of the family income. There is no maximum credit for each dependant. Thus, in Quebec, there is no tax benefit to claiming all medical expenses on the tax return of the spouse with the lower income. Moreover, medical expenses used to calculate the amount claimed for medical expenses on a taxpayer's tax return cannot be used on the spouse's tax return.

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 Canada Revenue Agency website at cra-arc.gc.ca and the Ministère du Revenu du Québec website at revenuquebec.ca/en/.


(1) Lines 330 and 331 of the federal tax return, 381 of the Quebec tax return and 5868 and 5872 of the tax form for other provinces and territories.


 

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Montreal, Quebec, H3B 1S6