There are many costs people don't necessarily consider medical expenses for tax purposes, so they don’t keep on top of them.GETTY IMAGES
Canadians benefit from universal health care and they often have private medical insurance, but they still pay out of pocket for many health-related needs.
Claiming these costs on your taxes can help recoup some of the money, but it requires strategies, from figuring out the most efficient way for households to put expenses through to determining what can be claimed province by province.
“It’s rather confusing to navigate,” says Laura Whiteland, a financial planner and owner of Inclusive Financial Planning in Truro, N.S.
She says her tax-preparation clients are often baffled about what medical expenses they can claim and the calculations involved “so they just throw everything possible at me.”
She adds there are many costs people don’t necessarily consider medical expenses for tax purposes, so they don’t keep on top of them. For instance, travel costs can be claimed if you live more than 40 kilometres away from a health-care provider.
Medical expense strategies
To make a medical claim on your taxes, you must exceed a threshold of eligible expenses, which for the 2025 tax year is the lesser of either 3 per cent of your net income or $2,833, all of which is set out on the Canada Revenue Agency (CRA) website.
The federal tax credit is 15 per cent of the amount of your expenses above that threshold level, Ms. Whiteland says. She notes this is a non-refundable credit, meaning it can reduce the amount of tax you owe to zero, but you won’t receive a refund for any excess.
It’s most advantageous for the spouse or common-law partner with the lower net income to claim the family’s medical expenses, Ms. Whiteland notes, since it results in a lower threshold amount and a higher claimable credit. You can claim medical expenses incurred during any 12-month period ending in the taxation year for which you’re filing the return.
Medical claims can be especially beneficial for aging Canadians, says Laura Tamblyn Watts, chief executive officer at CanAge, a national seniors’ advocacy organization based in Toronto.
“The most expensive years in your life are the last two years,” she says.
For example, tax breaks for renovations required to improve the accessibility of homes are “massively overlooked.”
The Home Accessibility Tax Credit allows up to $3,000 in a non-refundable tax credit on a capped 15 per cent of $20,000 a year in expenditures to address accessibility. The credit is available to individuals who are eligible for the Disability Tax Credit or those 65 or older.
If there are younger people in the home who also have accessibility needs that require renovations, they may qualify for the Multigenerational Home Renovation Tax Credit, which covers up to 15 per cent of $50,000 in eligible expenses, for a maximum refundable tax credit of $7,500.
Ms. Tamblyn Watts says there is no need to send receipts related to medical expenses with your tax return, but you may have to produce them if the CRA requests clarification.
Documentation can include receipts and prescriptions. The list of common medical expenses indicates if you need a prescription to support your claim, a certification in writing or any supporting materials such as Form T2201, the Disability Tax Credit Certificate.
Other costs that can add up
Canadians covered by private insurance can claim medical expenses that their plans don’t cover, says Chris Munn, a tax partner at Toronto-based Hogg, Shain & Scheck Professional Corp.
For instance, a couple claiming orthodontia expenses for a dependent child can include the extra amounts for other medical expenses that their insurance did not cover that year. “It can really add up,” Mr. Munn says of medical costs.
He adds that people new to making medical expense claims on their taxes are likely to get reviewed by the CRA and they will be required to submit receipts. “I especially see with elderly clients that the CRA seems to be stunned that they have a lot of medical expenses.”
People should be aware that most medical expense claims require prescriptions, Mr. Munn says. Elective procedures such as tummy tucks and facelifts aren’t claimable unless there’s a medical reason for them.
“Cosmetic surgery is eligible only if it is a result of some medical procedure or accident.”
To claim attendant care expenses for a nursing home stay or home care, a person must be eligible for the Disability Tax Credit, which assists people with disabilities and their supporting family members.
People mistakenly think the Disability Tax Credit is tied to a diagnosis, Ms. Whiteland says, so they often don’t apply for it. But those who simply have difficulty with a range (or a combination) of functions, including walking, mental functions, dressing, feeding, seeing, hearing and speaking, can apply for it.
Keep good records
People looking to make medical claims on their taxes should be prepared to do the work of collecting bills and figuring out totals. Pharmacies and clinics can provide printouts, Ms. Whiteland says.
Check that the procedure or medication you’re claiming is recognized as a medical expense in your province of residence. “Something might be claimable in nine provinces, but if you live in the 10th one where it isn’t, then you’re out of luck,” she says.
Some credits change over time, she adds, and recommends consulting a tax professional who’s up to date on the current rules.
“Very small changes in terminology can quickly change the way you’re perceiving something.”