Eligible medical expenses and credits for your tax return

The list of medical and disability tax credits and deductions is longer than most Canadian taxpayers realize and it’s not difficult to miss an eligible expense or credit.

The Income Tax Act offers a wide range of tax credits and deductions to persons who are ill or disabled, or support a relative with such infirmities. It’s important to understand these credits and deductions so you can claim them on your tax return and reduce the amount of tax you pay.

If you’re ill or disabled – or help support an ill or disabled dependant- you need to be aware of the following credits and deductions:

Disability Tax Credit

Taxpayers with severe and prolonged mental or physical impairment can claim a disability amount of $8,870 (2022 amount), which equates to a federal tax credit of $1,330.50.

To qualify, the impairment must be certified by a medical doctor, nurse practitioner (or other eligible practitioner, depending on the impairment) on form T2201.

Applications may be completed by these professionals on either the online digital form or paper form.  The impairment must have lasted, or be expected to last, at least a year. If you or a family member may be eligible for this, please discuss with your medical practitioner to apply to CRA.

Medical Expense Credit

Once over a threshold amount, you and/or your spouse can claim medical expenses for yourself, each other, and dependent children who were under the age of 18 years old at the end of the tax year. If you supported other family members, who relied on you for financial assistance, you may be able to claim medical expenses paid on their behalf as well (i.e. parents, grandparents, siblings, cousins, etc.).

The threshold amount is 3% of income or, if your income exceeds $82,633, a flat $2,479 for the 2022 tax year. Once over the threshold amount for the year, you can recover about 15¢ for each dollar you spend on qualifying expenses. It’s usually best to combine all family medical expenses on one return, and for the lower-income (and thus lower-threshold) spouse to make the claim. Of course, that spouse must owe enough tax to use up the credit.

When preparing taxes and claiming medical expenses, you can pick any 12-month period ending during the year. This allows you to plan for the credit based on when you have had, or expect to have, large medical expenses.

The list of qualifying medical expenses is extensive and includes:

• Payments for non-insured health care services received from physicians, dentists, psychologists, and many others.
• Prescription drugs and prescription eyeglasses.
• Premiums for private health insurance plans such as drug, dental and out-of-country coverage (even if you pay the premiums through payroll deductions by your employer).
• Traveling expenses if you need to travel more than 40 km for medical services. In addition, you may claim food and lodging expenses if you have to go more than 80 km. This is an important one for farm families.
• Attendant care, and care in a nursing home or other institution.
• Various medical devices such as hearing aids, wheelchairs, and dialysis machines.
• Guide dogs and expenses for maintaining them.
• Certain home renovation and moving expenses incurred to accommodate a disabled person.

Refundable Medical Supplement

Worth up to $1,316 for 2022, this refundable tax credit is available to working individuals (who make above $3,841 in 2022), with high medical expenses and adjusted family incomes of no more than $55,449. In a tax context, “refundable” means you get it even if your income is below the taxable threshold. The amount is reduced by family net income greater than $29,129 (in 2022).

This lesser-known credit can be claimed in addition to the medical expense tax credit and is commonly missed as a refundable credit on tax returns. For obvious reasons, many farm families qualify, as do students and others whose income happens to be low in years when their medical expenses are high.

Attendant Care Credit

If you can claim the disability tax credit, you may be eligible to include some or all of the costs of an attendant needed to help you earn certain income or go to school. Alternatively, you can claim attendant expenses as a medical expense if you have no “earned” income.

Disability Credit Transfer

Disabled individuals who cannot take advantage of all or part of this credit can transfer it to a spouse or other qualifying person who supports them.

Disability Credit Supplement 

In addition to the $8,870 disability amount that can be transferred from an individual, you can claim a supplement of $5,174 for eligible disabled children under 18 at the end of the year. This claim is reduced by childcare or attendant care expenses claimed for the disabled child.

Infirm Dependant Credit

You can claim this credit for certain relatives who are 18 years or older before the end of the year if they are dependent on you because of a mental or physical infirmity. While the individual does not need to live with you or qualify for the disability tax credit, his/her infirmity must create dependence on you for a considerable period of time.

The amount available for the credit is reduced on a dollar-for-dollar basis by the dependent’s income over a certain threshold.

Family Caregiver Amount Tax Credits

This credit is available if you live with and provide in-home care for a dependent with a physical or mental impairment (for example, a parent or grandparent 65 or older). Other relatives who are dependent because of a mental or physical infirmity may also be eligible.

This credit is subject to certain income thresholds, and if the dependent has income over a certain amount, no amount may be claimed.

Childcare Deduction Amount

Beyond the medical expense tax credit, the childcare deduction amount is increased, when the individual being cared for is had an impairment in physical or mental function and is dependent on you for care.

You or your spouse might have paid someone to look after your child who had a mental or physical infirmity. If you incurred these expenses so one of you could earn income or go to school, you can deduct them – up to $8,000 for a child (depending on the child’s age) who does not qualify for the disability amount and up to $11,000 for a child who does qualify.

How to claim medical expenses and credits

For the 2022 tax year, you can claim only eligible medical expenses on your tax return if:

• you, or your spouse or common-law partner paid for the medical expenses in any 12-month period ending in 2022 (for example May 2021 to May 2022)
• and they were not claimed in 2021

Generally, you can claim all amounts paid, even if they were not paid in Canada. However, you must exclude the portion that you have been or will be reimbursed for through an employer health insurance program, for example.

You claim medical expenses on line 33099 or 33199 of your T1 tax return.

Click here to learn seven simple ways to organize your receipts.

What if I missed claiming medical expenses or credits?

If you’ve realized that you missed claiming eligible medical expenses in the past, you may have options to resubmit your returns for those tax years.  The Canada Revenue Agency (CRA) generally allows you to make changes to your return up to 3 years after you filed it.

You will use CRA My Account and make a request to change your return.  You may be required to submit a CRA Form T1-ADJ (Adjustment Request) and submit a request in writing, along with all supporting documentation to your designated CRA Tax Centre.

If the 3-year period has expired, CRA may still allow changes to your tax returns under the “Taxpayer Relief Provisions” in Information Circular IC 07-1.

The bottom line here is that rules relating to medical tax credits and expenses are both complex and confusing. It’s best to have your tax advisor analyze your particular situation and determine the claim and/or mix of claims that gives you the best tax advantage.

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