No one likes high medical expenses, but at least they can reduce your tax bill. That’s if the Canada Revenue Agency recognizes them as allowable.
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Many Canadians are confused as to what the Canada Revenue Agency (CRA) recognizes as a medical expense, and how they help reduce taxes.
The first thing to know is that a household’s medical expenses can be grouped together on either partner’s return, but they must exceed 3% of that taxpayer’s income in order to have any impact at all. For example, if the lower income earner made $20,000 in the year, the total medical expenses must exceed $600 (3% of $20,000) in order to reduce taxes.
As for what’s allowed, the rules aren’t always intuitive. For example, treatments by a naturopath are allowable, but their prescriptions aren’t allowable because they don’t have to be dispensed by a licensed pharmacist. Services performed by a medical professional relating to In Vitro Fertilizaton are allowable, but the cost of sperm is not.
CRA has a partial list of allowable medical treatments, devices, and services here:
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/330/llwbl-eng.html
The rules also vary province to province. Generally all services performed by licensed medical practitioners are considered allowable medical expenses, but each province has its own definition of ‘licensed medical practitioner’.
So while acupuncture performed by a licensed acupuncturist is considered an allowable medical expense in Quebec*, an Ontario resident can’t use it for their medical claim because Ontario doesn’t license acupuncturists. The reverse is true of massage performed by a Registered Massage Therapist (allowable in Ontario but not in Quebec).
A useful chart of expenses for which different provinces have different rules is here:
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/330/ampp-eng.html
* As of December 31, 2013. Refer to the Canada Revenue Agency to confirm the current rules for your province.
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Hello, just wanted to know if the accupunture medical claim info is still the same now (April 2016) as it was 2 years ago in your answer: Great explanaition by the way!
“So while acupuncture performed by a licensed acupuncturist is considered an allowable medical expense in Quebec*, an Ontario resident can’t use it for their medical claim because Ontario doesn’t license acupuncturists.”
The only reason I ask is because on the current CRA website for Ontario it has the Profession – Acpunurist box checked off for ON, in the document – Authorized medical practitioners by province. Why would the box be checked off as okay if there are no licensed acupuncturists in the province. Thanks for any help you can provide..
Hi Shawn,
You are correct: since this article was written, acupuncturists have become approved medical professionals for the purposes of the medical expense credit in Ontario.
–Sunny
Hi i want to know if you have experience in preparing taxes for Registered Massage Therapist?
We do prepare taxes for a number of clients in the personal health services, including massage, acupuncture, and naturopathy.
For acupuncturist, do you need a referral by a family physician in order to claim under medical expenses. Also does herbs prescribed by the acupuncturist/TCM practitioner also considered as medical expenses? And how much do you usually get back (20%? after a certain fixed amount?). Would getting a private health insurance be a better options?
Hi Tom.
You don’t need a referral, but you do need to live in a province where acupuncturists are considered to be authorized medical practitioners.
Services provided by approved medical practitioners are always considered medical expenses, with or without a referral. But each province has a different list of what practitioners qualify. You can consult CRA’s list of approved practitioners by province here.
However products proscribed by such practitioners such as herbs or homeopathic tinctures usually don’t qualify. To qualify as a medical expense, a product you ingest must be handled and controlled by a pharmacist. (Exceptions are special foods for people with diagnosed issues such as celiac disease; in that case, you can write off the difference in the cost of the special foods compared to the ‘regular’ version).
Medical expenses must exceed 3% of your income in order to qualify for the credit. Any amounts above that threshold will usually garner a credit worth about 20% of their face value. You can claim all the medical expenses of yourself, your spouse, and your dependants on your return, so long as no one else is claiming them.
If you’re self-employed and a sole proprietor, private health insurance usually gives you a better tax outcome, dollar for dollar.