Medical expenses: the threshold, and whose return
Yan Zhou (周艳) · Licensed Life & Health Insurance Agent, Financial Services Regulatory Authority of Ontario (FSRA)
The short version
- Medical expenses are not deductible dollar for dollar. There is a threshold first.
- The threshold is the lesser of 3% of net income or the annual cap.
- Either spouse can claim the family total, and the lower earner is usually better — with one exception.
- If household income is low enough there is also a refundable supplement.
If something here applies to you, just ask me. Plain answers, no sales pitch.
(General tax information only. It is not tax advice. Circumstances differ — check the CRA website or speak to a qualified accountant before you act.)
How the threshold works
Only the amount above the threshold produces a credit.
The threshold is the lesser of two figures: 3% of the claimant’s net income, or the annual cap set for that tax year.
Worked through: net income $30,000 and $5,000 of expenses. 3% of $30,000 = $900. The claim is $5,000 − $900 = $4,100.
Someone expecting to claim the full $5,000 is out by $900.
Whose return?
Put the family total on one return. Either spouse can claim it.
The lower earner usually wins, because 3% of a smaller income is a smaller threshold.
The exception matters: if the lower earner owes no tax, a non-refundable credit is worth nothing to them. Then the higher earner is better, even with the bigger threshold.
What counts
- Prescription drugs, prescribed by a practitioner and recorded by a pharmacy.
- Dental treatment, eyeglasses and contact lenses.
- Amounts you paid yourself after any private plan reimbursed you.
- Premiums you pay for a private health plan, including amounts in box 85 of a T4.
- Travel for treatment, where you had to go far enough to qualify.
Only the part you actually bore counts. If insurance reimbursed most of a bill, claim the remainder, not the total.
The twelve-month window
You choose any twelve-month period ending in the tax year. It does not have to run January to December.
That lets you group a heavy stretch of costs into one claim, rather than splitting it across two years and losing to the threshold twice.
The refundable supplement
There is also a refundable medical expense supplement for lower-income working households. Refundable means it can pay out even when you owe no tax.
It is calculated separately and has its own income tests.
If something here applies to you, just ask me. Plain answers, no sales pitch.
(General tax information only. It is not tax advice. Circumstances differ — check the CRA website or speak to a qualified accountant before you act.)
