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.
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:
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:
* As of December 31, 2013. Refer to the Canada Revenue Agency to confirm the current rules for your province.