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income tax

Medical Expense Claims

To Our Clients:

We are writing to provide you with information about the documentation that is now being required by Canada Revenue Agency to support your claims for medical expenses due to changes in their Administrative policies.

This may result in both you and we having to spend additional time and effort related to your claim, specifically at the time of filing, or if the documentation is not on hand then, if and when your claim is reviewed.

Documentation required to support medical expenses:

  1. Medical service costs must be supported by receipts for the service and proof of payment.
  2.  If a portion of the medical expenses was covered under an insurance plan, you may claim both the amount not reimbursed as a deductible portion plus the costs of the insurance. The cost of the insurance must be supported by receipts unless the plan is an employer based plan where the employer has recorded the eligible portion of the expense in Box 85 of your T4 Slip.
  3.  Claims for costs of plans such as Alberta Blue Cross require a payment confirmation available from ABC. Please note that no provincial health care premiums are deductible.
  4.  Costs of medical services provide purely for cosmetic purposes may not be considered to be an eligible medical expense.
  5.  Please note that items, whether prescribed or not, that are not a drug requiring a prescription in order to obtain them, such as vitamins, holistic supplements etc. are not deductible.
  6.  Should you acquire the report from your Pharmacist detailing the prescriptions that are filled:
    1. The report must show the details including the DIN of each item, and
    2.  If the report includes non-prescription vitamins or supplements, they must be identified because they cannot be claimed. Please assist us by identifying these non-deductible items
  7. Where costs of attendant care are paid there are very specific rules related to claiming either or both those costs and the Disability Tax Credit. Should you possibly be in this situation, you will need to discuss this matter with us.

Supporting costs of medical travel:

  1. If you are required to travel in order to receive medical attention you must be able to support that:
    1. The particular medical service is not available in the city or town in which you reside
    2.  If the services are available in your city or town, the letter must state the additional reason(s) that the particular medical centre to which you travelled had to be used. They are requiring that this be so because of some significant difference, such as:
      1. This is the closest medical centre in which the service is available
      2. Due to a waiting list situation, you were able to receive the service in a significantly reduced time
      3. The cost of the service at the particular location was significantly less than it would be at a medical centre closer to your residence
  2.  You must provide proof of attendance at the particular appointments provided by the medical centre, the physician’s or other medical practitioner’s office, the hospital or other facility, such as a client ledger prepared and printed on stationery to identify the facility
  3. You must provide proof of the distance travelled. Mileage can be claimed where the distance to obtain the service is greater than 40 km. Other travel expenses can be claimed where the distance to obtain the medical service is greater than 80 km.
    1. Claims for mileage and meals may be calculated using the simplified method, or
    2.  They may be based on the actual cost method. Note that the detailed method requires that vehicle costs for the entire year be detailed and prorated between medical travel and total mileage for the year
  4. If you were required to stay in accommodation in order to receive the medical service, you must have receipts for the accommodation cost
  5. Parking costs must be supported by receipts
  6. If you must be accompanied by someone in travelling to acquire the medical service, this must be stipulated in the letter. Note that where the patient is a child, they will not accept that both parents had to accompany the child

Should you need further information, we would be pleased to provide you with Canada Revenue Agency’s Income Tax Folio S1-F1-C1, Medical Expense Tax Credit, a 30 page document detailing the medical expense tax credit.

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