Ineligible Medical Expense Claims & Some Eligible Claims

Ruth Horst

While taxpayers can claim a variety of medical expenses, there are certain costs related to health that are not eligible for claims. The Canada Revenue Agency (CRA) outlines these exceptions in their Medical Expense Guide RC4065. The list includes:

• Athletic or fitness club fees
• Non-prescription birth control
• Blood pressure monitors
• Any cosmetic surgery
• Diaper services
• Health plan premiums paid by an employer & not included in income
• Liquid meal replacement products
• Mobile apps that help a person manage blood glucose levels
• Nebulizers to turn liquid medicine into a mist that can be inhaled
• Organic food
• Over-the-counter medications, vitamins, supplements
• Personal response systems such as Lifeline
• Premiums to provincial & territorial Health Plans
• Radon testing or mitigation treatment system
• Any medical expense that is reimbursed or will be reimbursed

Each Province and Territory has their own list of allowable medical expenses which may differ from the federal list. It is important to verify that the medical expenses that are being claimed are deductible in both federal and provincial/territorial jurisdictions.

Service Animals – These are specially trained animals that assist individuals with impairments, such as:

• Blindness
• Profound deafness
• Severe & prolonged marked restrictions of the use of arms or legs
• Severe autism or epilepsy
• Severe diabetes
• Severe mental impairment

To qualify, the animal must be trained to perform specific tasks to assist the person in managing their impairment. The animal must be trained and provided by a registered organization. Animals that only offer emotional support do not qualify as eligible.

The costs associated with acquiring and training the animal, as well as expenses for its care and maintenance are deductible. This includes food and veterinarian care. Reasonable travel expenses, such as transportation, board and lodging, for the person to attend a facility that trains individuals to handle the animals are also eligible.

Medical Use of Cannabis – Many Canadians are federally licensed to posses and use medical cannabis (marijuana) in Canada, with a prescription from a physician or nurse practitioner. Medical cannabis may benefit individuals with various conditions, including but not limited to anxiety, arthritis, chronic pain, cancer, epilepsy, and multiple sclerosis.

In 2001, the Marihuana for Medical Purposes Regulations (MMPR) were enacted. These regulations underwent updates and changes over the years, and the terms regarding the deductibility of cannabis-related costs as a medical expense were further revised with the introduction of The Cannabis Act, which came into effect on October 17, 2018.

To qualify for this medical expense, the individual must have a certificate from a medical practitioner authorizing them to access cannabis. They can then purchase it directly from a federally licensed seller, register with Health Canada to produce a limited amount for their own medical use, or designate someone to produce it on their behalf.

Once registered with a licensed seller the individual is required to make all purchases through that seller. In this case, the amounts paid for cannabis, cannabis oil, cannabis plant seeds, or cannabis products are eligible to be claimed as a medical expense.

If an individual has a registration certificate allowing them to legally produce a limited amount of cannabis for their own medical purposes, the cost of growing and producing cannabis is an eligible medical expense.  However, the cost of associated expenses such as pots, soil, nutrients, and lights is not considered an eligible medical expense.

If designating someone to produce cannabis on their behalf, the individual must ordinarily reside in Canada and be 18 years of age or older, and may only be authorized to produce cannabis for a maximum of two people.

The application process to produce medical cannabis is quite rigorous and involves a 13 page application including a Police Report confirming that the individual has no cannabis-related offense convictions.

Fertility Expenses – Expenses related to challenges in achieving parenthood are deductible for individuals facing infertility, those in same-relationships, or choosing to become a single parent.

Fertility-related expenses include egg and sperm freezing and storage, provided the intent is to preserve them for the purpose of conceiving a child in the future. This is especially important for women who are undergoing medical treatments such as chemotherapy or surgery that could affect their fertility.

Fertility-related expenses, including in vitro fertility programs (IVF) programs and procedures are also deductible. This includes any fees paid to medical practitioners or clinics for conceiving a child. As of 2022, expenses paid to a surrogate mother or a donor of sperm, ova, or embryos may be eligible, provided they were incurred in Canada.

Dental Expenses – The amounts paid (and not reimbursed) for dental care qualifies for the medical expense tax credit, unless they are for cosmetic reasons. Teeth whitening and straightening for purely aesthetic purposes are cosmetic procedures. The types of expenses that qualify for this credit range from routine cleanings, examinations and fillings to more complicated procedures such as root canals, crowns, implants, extractions, dentures, gum grafts, biopsies and orthodontic work. Premiums paid to an insurance company for dental coverage also qualify.

Gluten-Free Products – While many people choose to avoid gluten and may feel better as a result, the incremental cost of gluten-free products is only deductible for individuals diagnosed with Celiac Disease. Celiac Disease is an autoimmune disorder that affects the small intestine and often causes digestive issues. There is no cure for the disease and it can only be managed by following a strict gluten-free diet.

Only the incremental costs of purchasing gluten-free (GF) products may be deducted. To claim this deduction, individuals must keep track of all GF purchases and be aware of the prices of similar products that contain gluten.

The spreadsheet would detail the price of each GF product compared to the price of the same gluten product. The difference between the two prices is eligible for the medical deduction. For example, if a loaf of GF bread costs $6.50 and a loaf of bread containing gluten costs $3.00 then $3.50 per loaf purchased throughout the year would be deductible.

If audited by the CRA, the individual must be able to produce a spreadsheet detailing their purchases, along with receipts as well as their diagnosis from a medical practitioner.

For more information about these and other deductions available for the medical expense tax credit, refer to the CRA Medical Expenses Guide or speak with your Tax Professional. Remember that any expense that has been or will be reimbursed is not eligible for the medical expense deduction.