Canadian Taxation

2013 Personal Income Tax Questionnaire – Medical expenses

Published On February 1, 2014 | By Joseph (Ken) | 2013 Tax Time Questionaire, Personal tax
 medicalToday’s article relates to question #7 on the 2013 Personal Income Tax Questionnaire sent to clients.

WILL YOU BE CLAIMING MEDICAL EXPENSES? 

 

There are two parts to claiming medical expenses:

1) Medical Expense Tax Credit

2) Refundable medical expense supplement

 

MEDICAL EXPENSE TAX CREDIT

Requirements are:

  • medical expenses claimed can be incurred by the individual (or spouse) on behalf of to the individual; the individual’s spouse or common–law partner; a child of the individual who is under 18 years of age at the end of the year; or a child of the individual’s spouse or common–law partner who is under 18 years of age at the end of the year.

     

  • medical expense claimed can be incurred by the individual (or spouse) on behalf of a person who is a dependant of the individual including a child, grandchild, parent, grandparent, brother, sister, uncle, aunt, niece or nephew of the individual or of the individual’s spouse or common–law partner

     

  • medical expenses claimed must be total more than the lesser of a fixed amount ($2,109 for 2012) or 3% of the individual’s net income for the year.

     

  • the medical expenses must be eligible medical expenses as described in subsection 118.2

     

  • the medical expenses must have been paid within any 12‑month period ending in the calendar year (ie January 2, 2012 until January 1, 2013 is 12 months ending in 2013)

     

  • the medical expenses must be proven by filing supporting receipts (medical expense tax credit is one of the most common tax deductions reviewed by the CRA)

     

  • the medical expenses must not have been reimbursed or be reimbursable (ie via a extended health plan)

     

  • the medical expense cannot qualify for the medical expense tax credit unless it has actually been paid or is deemed to have been paid by the individual (or spouse) claiming the credit or his or her legal representative.

Some additional facts to consider:

  • As a general rule, eligible medical expenses are not restricted to those paid in Canada or for medical services provided in Canada.
  • Alterations to an existing dwelling or construction of a new dwelling can be deductible, if the expenses were paid to enable the patient to gain access to the their home

  • Tutoring services if the tutoring is supplementary to the primary education the patient has a learning disability or a mental impairment
  • Travel expenses may be eligible medical expenses (including simplified KM’s and meals) if:
    • the patient travels to a place that is at least 80 kilometres away from the locality where he or she dwells to receive medical services;

       

    • substantially equivalent medical services are unavailable within the patient’s locality;

       

    • the patient takes a reasonably direct travel route, having regard to the circumstances; and

       

    • it is reasonable, in the circumstances, for the patient to travel to that place for the medical services.


The Attendant care deduction is a possible way to split income within a family.  A disabled retiree can claim a medical deduction for attendant care paid to a family member.  If you are caring for a disabled family member who’s tax rate is high and your tax rate is low, you can report attendant care income from the disabled family member and they will receive a corresponding deduction under medical.

  • Under paragraph 118.2(2)(b), eligible medical expenses of an individual for a tax year include remuneration paid for one full–time attendant

     

  • the patient is an eligible person with a disability in the tax year in which the expense is incurred; and

     

  • at the time the remuneration is paid, the full–time attendant is not under 18 years of age nor the individual’s spouse or common–law partner (the attendant can be a relative but not a spouse or common-law partner).

     

  • Paragraph 118.2(2)(b.1) allows an individual to include up to $10,000 as an eligible medical expense for a tax year

 

The increased awareness of Gluten’s effect on ones health has resulted in an increased interest in claiming Gluten-free products as a medical expense.

“If you are filing your income tax and benefit return electronically or on paper, do not send any supporting documents. However, keep the following documents in case we ask to see them at a later date:

  • a letter from a medical practitioner confirming the person suffers from celiac disease and requires GF products as a result of that disease;

     

  • a receipt to support the cost of each GF product or intermediate product claimed; and

     

  • a summary of each item purchased during the 12-month period for which the expenses are being claimed 

REFUNDABLE MEDICAL EXPENSE SUPPLEMENT

“an individual who has high medical expenses and low income for a tax year may be able to claim a refundable medical expense supplement under section 122.51”

Requirements are:

  • the individual must have been resident in Canada throughout the year;

     

  • the individual must be at least 18 years of age at the end of the tax year;

     

  • the individual must have earned at least $3,268 during the year 

By earned it means you must have employment or small business income of at least $3,268 during the year (2012).

Also note that the maximum amount that an individual may receive as a medical expense supplement is lesser of $1,119 (2012) or 25% of allowable medical expenses claimed.

 

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About The Author

Joseph (Ken)
(Ken) is a Registered Public Accountant with over 25 years of public practice experience in the accounting profession. Ken specializes in accounting information systems, taxation and financial reporting.

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