Medical Expenses and Your Taxes

You have a benefit plan. That plan likely covers most of your necessary medical expenses. No plan covers everything.

Did you know the amounts you pay out of your pocket can be used for more credits to reduce your taxes? In Canada, we have something called the Medical Tax Exemption Credit. (MTEC) This credit allows you to deduct certain medical related expenses.

Here are some examples of eligible expenses:

• Your dental plan covers 80% of the cost of visiting your dentist.
  • $360 bill x 80% = $72 you pay out of your pocket. (That’s way better than paying the full $360!!)
• Your health plan covers 100% of the cost of massage up to a reasonable amount. (Currently around $100 for an hour)
  • You chose to have a massage that cost $160.
    • You are out of pocket for $60
  • Your prescription glasses cost $800
    • Your plan covers $0

If you pay any part of your health or dental premium, that premium also counts towards the credit. If you get a T4 from an employer who pays part of your premium it may have a box 85. If so, that amount also qualifies for this credit. (Note: not all employee benefits qualify for this credit. As such, you may pay some premium and do not have a box 85 amount)

How do you get this credit???

1. Keep all of your medical and dental receipts (even if you have a benefit plan).
2. At the end of each year, log into your insurer portal and pull your Explanation of Claims reports. These will show what your insurer paid and what you paid.
3. Check the CRA MTEC website to see if your expense qualifies.
   1. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/lines-33099-33199-eligible-medical-expenses-you-claim-on-your-tax-return.html#mdcl_xpns
4. In your tax filing, use line 33099 to claim the total eligible medical expenses that you or your spouse paid for any of the following people:
   1. You, your spouse or common-law partner, your or your spouse or common-law partner’s children who were under 18 years of age at the end of the tax year
5. Add it all up.
6. Enter the total on line 33099

The total will not likely make a huge change in the total of your income taxes. That said, our taxes are set up to allow deductions. If you don’t use the ones that are designed to help you, you simply choose to pay extra taxes. I hope this is a first step in learning that there are lots of ways to reduce your payable taxes. Ask questions. Educate yourself. Keep your money!