Fiscal and Financial Planning Guide 2024-2025

General > Medical expenses

The medical expenses tax credit is 32.5% (12.5% at the federal level and 20% for Quebec).

Reduction of medical expenses

Medical expenses are reduced based on net income.

At the federal level, medical expenses are reduced by 3% of individual net income.

For example, a taxpayer earning $60,000 will be able to claim 12.5% credit on medical expenses that exceed $1,800 ($60,000 x 3%). Medical expenses cannot be reduced by more than $2,635. Thus, a taxpayer with an income exceeding $91,966 will be able to claim medical expenses exceeding $2,759 ($91,966 x 3%)

In Quebec, the rule is much more penalizing, because medical expenses are reduced by 3% of family net income, with no reduction limit. For example, if the family net income is $300,000, only the portion of medical expenses that exceed $9,000 ($300,000 x 3%) will be eligible for the 20% credit.

Eligible fees

  • Pharmacy prescriptions (portion not covered by insurance);
  • Dentist, eyeglasses, chiropractor, etc;
  • Premiums paid to a health insurance company (e.g. through your employer, a professional association or private company);
  • In Quebec, health insurance premium paid by the employer (box J of the Relevé 1);
  • Quebec Drug Insurance Plan Contributions.

Strategies

  • Medical expenses for a spouse or minor child may be grouped with those of a taxpayer. Thus, at the federal level, the income-based reduction would apply only once.
  • At the federal level, it is often advantageous to claim medical expenses on the tax return of the spouse with the lowest net income when the net income is less than $91,666.
  • If you are considering orthodontic treatment for a child, it may be beneficial to make an agreement with the dentist to pay for them in one single amount rather than over two or three years. This would make it possible to be penalized only once by income-related reduction. A discount could be negotiated with the dentist if all fees are paid in one payment at the beginning of treatment rather than over 2 or 3 years.

In Quebec, travel and accommodation expenses are eligible expenses when medical care is not available within 200km of home.

If you have retired and are no longer covered by a health insurance through your employer or professional association, it is important to let us know because you will have to pay the Quebec Drug Insurance Plan contribution that will be calculated on your Quebec tax return (maximum $737 for each spouse).

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