Medical Expense Tax Credit

October 29, 2021

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While personal tax season is still a few months away, it is never too early to start organizing your records and making sure that you are hanging onto anything you may need when it comes time to file your taxes in the spring.

Medical expenses are eligible for a tax credit on your personal tax return, HOWEVER, only the amounts in excess of the lesser of 3% of your net income OR $2,421 (2021 limit) can be claimed.

If you plan to claim medical expenses on your personal tax return, please ensure you keep receipts for out-of-pocket expenses.  On the receipts, CRA wants to see the name of the patient, description of services or devices provided, date of payment, who made the payment, and DIN for prescriptions.  Many pharmacies will print off a detailed record of all prescriptions a patient purchased during the year including all information required by CRA, such as the DIN.  This can simplify the process and save you from having to organize and total up all of your individual prescription receipts for the year.

Travel expenses are deductible if you must travel more than 40 km to attend a medical appointment or procedure AND only if the service is not available in your area. In addition to mileage, if you must travel more than 80km for a medical appointment or procedure you can claim your meals.  You can even use CRA’s simplified method to claim the meals which allows you to claim $23 per meal (2021 rates) instead of saving and totaling up each meal receipt.  If you travel over 200km for a medical appointment or procedure, you can also claim the costs of accommodation.   It is not uncommon for CRA to still require proof of the appointment in order to claim these costs.  Many doctor’s offices will provide you with a letter or statement confirming your attendance at the appointment that can be used to support the claim.

Please keep a “proof of appointment attendance,” number of km traveled (round trip), number of travel days needed to attend the medical appointment or procedure (these days can be used to determine the number of meals under the simplified method) OR actual meal expenses can be deducted so keep receipts, hotel or accommodation receipts and parking receipts.

This link will take you to CRA guide RC4065  https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4065.html  which will give you a comprehensive list of eligible expenses and more detail on what can be claimed.

For more information on the types of things you can claim and what you are required to keep to support your claim, contact our office.

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