Claiming the Medical Tax Credit
Posted by Gail | Filed under Taxes
Lots of people don’t understand how to claim the medical tax credit on their returns. Not surprising since much of the information that’s available is written in Taxeeze. Since most people don’t speak Taxeeze, they’re left scratching their heads. Let’s see if I can simplify this for you.
First, the claim for medical expenses is a tax credit, not a deduction. See this blog for the difference.
The 3% to which the credit refers is the income threshold used to calculate the tax credit. What that means is that you take your total medical expenses (you should group them all together and make one claim for you, your spouse and the kids) and you subtract 3% (or $2024 for 2010, whichever is lower) of your net income before you can begin making a claim.
Since the claim is based on income, the lower income spouse should make the claim, providing they’ve paid enough tax to claim the full amount. So do both calculations and then decide. And remember, you can carry forward some of the expenses from 2010 to 2011 if that works out better for you. How?
Expenses you’ve paid in any 12-month period ending in the tax year for which you’re claiming can be used. So you could use expenses from Jan 2010 to Dec 2010 or claim only some of the expenses in 2010 and the rest in 2011 (from say, September 2010 to June 2011) or depending on what’s more advantageous.
Don’t overlooked premiums you’ve paid for health insurance, including medical and dental premiums, even if it’s through your employer. As long as you paid you can claim. And don’t forget about eyeglasses. While they may be a fashion statement, they’re also a medical deduction, as long as they’ve been prescribed.
You can only claim the amount of medical expenses you actually paid and were not reimbursed for. If you paid a co-insurance amount or a deductible amount, you can claim them on your taxes.
To see a full list of which medical expenses are eligible, go to the Tax Man’s site. Since medical claims differ by province, pay particular attention to which medical practitioners are eligible by province or territory.
If you had to travel at least 40 kilometres one way for your treatment, you can claim that too. You have to log your distance and claim the per kilometre amount available in your province. Go to googlemaps.com and enter “your postal code to the facility’s postal code” for the distance you’ve been driving. Take a print of this for your records, in case you need proof. Then get a letter from the facility showing the days you attended.
If you have to travel 80 kilometres or more one way, the claim can also include meals and accommodation. And if the patient is certified as unable to travel without an attendant, an additional claim for the travel costs can be made for a travelling companion.