Claim Your Medical Expenses
2 Apr 2009

The federal medical expense tax credit recognizes the effect of above average specific medical and disability-related expenses on an individual’s ability to pay tax by providing relief equal to 15% of the eligible medical and disability-related expenses in excess of a threshold.

You can claim eligible medical expenses that you incurred for yourself, your spouse or common-law partner or your (or your spouse or common-law partner’s) children who were under age eighteen during the year who were dependent on you for support. For 2008, creditable medical expenses are reduced by the lesser of $1,962 or 3% of your net income for the year. You must include your receipts for your medical expenses when you claim the tax credit, and you cannot claim expenses already claimed in a previous return. The medical expenses must be paid within any 12-month period ending in the taxation year. The CRA provides extensive details regarding the nature of expenditures that qualify as medical expenses.

In addition, if you paid medical expenses for a relative who was dependant on you, these expenses may also qualify for a credit. Except for children and grandchildren, the relative must be resident in Canada. The total of these expenses must exceed the lesser of $1,962 and 3% of the dependant’s net income for the year, up to a maximum of $10,000.

Under changes proposed in the 2008 federal budget, which apply to 2008 and subsequent years, the list of eligible expenses is expanded to include amounts paid to purchase, operate and maintain the following devices prescribed by a medical practitioner: altered auditory feedback devices for the treatment of a speech disorder, electrotherapy devices for the treatment of a medical condition or a severe mobility impairment, standing devices for standing therapy in the treatment of a severe mobility impairment, and pressure pulse therapy devices for the treatment of a balance disorder. Also, the rules are extended to include costs associated with service animals specially trained to assist an individual who is severely affected by autism or epilepsy.

This tax tip is a publication of BDO Dunwoody LLP on developments in the area of taxation. This material is general in nature and should not be relied upon to replace the requirement for specific professional advice. The information in this tax tip is current as of 2 Apr 2009.