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Benefitting fully from the medical expense tax credit

Many taxpayers do not fully benefit from the tax credit for medical expenses to which they are entitled. Here are some examples of medical expenses that are eligible for a tax credit:

  • payments to a health professional (e.g. doctor, nurse, dentist, etc.);
  • amounts paid to a public hospital or a licensed private hospital;
  • premiums paid to a private health insurance and dental insurance;
  • amounts paid for the purchase of medical equipment prescribed by a physician (e.g. glasses, contact lenses, prostheses, orthotics, etc.);
  • eligible amounts not reimbursed by health insurance plans and dental plans (e.g. the deductible, coinsurance, etc.).

These expenses may be incurred by either spouse or for a dependent. To be deductible, expenses must be paid over a 12-month period ending in 2011 and must not have been deducted in 2010.

At the federal level

A 15% tax credit may be claimed for eligible medical expenses that exceed the lesser of two amounts: 3% of net income or $2,052. Since the credit is calculated on an individual basis, it is more advantageous for the person with the lowest income in the household to claim the tax credit (provided, of course, that person pays tax).

Changes for 2011: eligible expenses for dependents are no longer limited to $10,000.

For more information, see Guide RC4064 on the Canada Revenue Agency Web site.

At the provincial level

Rules as to the percentage of tax credited that may be claimed are different from province to province. Because group medical or dental insurance premiums paid by the employer are a taxable benefit in Quebec, they are fully eligible for the tax credit. As a result, many taxpayers in that province are entitled to the tax credit.