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The tax credit can make you feel better about the medical expenses you incur each year. In return, you can claim it on your tax return and get a refund of eligible medical expenses. But before you can claim the credit, you will need to know what medical expenses are eligible for the credit. And yes, the credit can be worth up to $2,000 annually for eligible taxpayers and dependents.
The medical expense tax credit is a for eligible medical expenses incurred by an individual or a taxpayer and their spouse or common-law partner for themselves or an eligible dependant. It can be claimed in all income tax brackets. You can read more about the medical expense tax credit in this blog. But before we get into that, let’s understand what medical expense tax credit is and who can qualify for it?
What is the Medical Expense Tax Credit?
The Medical Expense Tax Credit is a refundable medical tax deduction canada available to eligible individuals with income less than the tax return filing threshold and medical expenses of $10,000 or more. The METC can be claimed on Line 130 of tax forms.
– The eligible individual can claim the credit if they have income of $10,000 or less and medical expenses of $10,000 or more.
– The eligible individual can claim the credit if they have income of $10,000 or less and medical expenses of $10,000 or more.
– The eligible individual can claim the credit if they have income of $10,000 or less and medical expenses of $10,000 or more.
– The eligible individual can claim the credit if they have income of $10,000 or less and medical expenses of $20,000 or more.
– The eligible individual can claim the credit if they have income of $20,000 or less and medical expenses of $20,000 or more.
-The eligible individual can claim the credit if they have income of$20,000 or less and medical expenses of$20,OS00or more.
-The eligible individual can claim the credit if their income is between$32,006 and $48,006and their medical expenses are between$4200 and$9200 per year.
-The eligible individual can claim the credit if their incomeis atleast$46 000 but notmore than$72 000and their medical expenses are between$4500 and$9200 per year.
-The eligible individual canclaimthe creditif his income is at least$46 000and his medical expensesof$4500or moreper year
Who is Eligible for the METC?
The medical expense tax credit (METC) is a non-refundable tax credit available to eligible individuals and families for eligible medical expenses. Under the income tax Act, eligible medical expenses include those incurred for medical services received in Canada as well as medical expenses for travel related to medical care.
The CRA’s general views regarding the METC are contained in the income tax Folio S1-F1-C1, Medical Expense Tax Credit. This tax receipt provides a general overview of the medical expense tax credit and outlines the eligible medical expenses that can be claimed. The receipt also outlines the income and net income eligibility requirements of the credit.
In general, you can claim the medical expense tax credit if you meet both of the following conditions:
– You are an individual or family eligible to claim the tax credit under subsection 118.2(2) of the Income Tax Act; and – You have eligible medical expenses (as described in subsection 118.2(2)) that add up to 15% of your income for the year.
Eligible medical expenses are not restricted to those paid in Canada or for medical services provided in Canada. They can include any expense related to obtaining or providing medical services listed in subsection 118.2(2).
It is important to note that eligible medical expenses can be claimed only once per year for each tax return filing period.
What Medical Expenses Qualify for the METC?
– Medical expenses which qualify for the medical expense tax credit under the income tax act are limited to those expenses eligible under subsection 118.2(2) of the income tax act- expenses paid for medical services or prescriptions that can be shown to have been necessary for the promotion of public health or the prevention or treatment of disease, and expenses paid for eligible medical travel expenses as outlined in subsection 118.2(3) of the income tax act- expenses eligible for medical expense tax credit include eligible medical services listed in Line 33099 and 33199 of the income tax return – Canada.ca
– Expenses eligible for medical deduction include medical expenses relating to eligible medical services as indicated on the receipt, such as doctor’s visits, prescribed medication, hospitalization and medical treatments such as surgery and dental care
– Expenses not eligible for medical expense tax credit must be determined on a case-by-case basis based on your income level and other income sources
– To claim the medical expense tax credit, you must complete and file your income tax return for the year in which you incurred the expense
How to Claim the METC on Your Tax Return?
– You can claim the Medical Expense Tax Credit (METC) through your personal tax return
– You must incur medical expenses that qualify under the Income Tax Act in order to claim the METC
– The income tax credit is non-refundable, so you can only claim it on income tax income statements
– If you meet the eligible medical expense income and age conditions, you can receive a non-taxable income tax credit of up to $2,166 for eligible medical expenses for 2017
– Keep track of your medical expenses and receipts to ensure that you meet the income and age criteria for the tax credit
– To claim this credit in years past, you must have medical expenses of $10,000 or more and incurred them in 2015 or earlier years. You must also have income of $10,000 or more
– In either case, you can use a medical expense tax credit calculator to determine your eligible tax credit
Eligible dependants for the METC include children or stepchildren aged 19 or older, grandchildren, grandparents, brothers or sisters, aunts, uncles, nieces, and nephews. However, any individual age 12 or older who qualifies as a dependent can claim the tax credit.
You must use the same 12-month period for all members of the family for medical expenses in order to qualify for the METC. Also, medical expenses must be necessary for their health care and not purely personal in nature. Lastly, medical expenses must be reasonable and reasonable cannot be determined by a parliamentary committee.
Maximums and Limitations of the METC
The maximum eligible medical expenses that can be claimed for the Medical Expenses Tax Credit (METC) is $2,000. The eligible medical expenses can include expenditures on medical practitioner services, medical supplies, medical devices and pharmaceuticals. Trusts are not eligible for the METC refundable medical expense supplement.
The types of medical expenses eligible for the tax credit includes payments to medical practitioners, hospitals and care of individuals with mental or physical impairment and care due to lack of normal mental capacity. In addition to eligible medical expense claims, income tax-registered organizations can claim tax credit for eligible medical expense claims made by its employees in accordance with the tax credit provisions of the Income Tax Act.
The medical expense tax credit can be claimed by eligible individuals and families, who can use it to reduce their tax burden. The credit is granted to help offset the medical expenses of people in the form of tax reductions. It can be used by individuals, families, or personal tax returnants who have medical expenses that exceed a particular income threshold. The credit can be claimed for eligible medical expenses incurred in a particular tax year. With the credit, eligible taxpayers can reduce their tax bills by allowing their medical expenses to be taxed at a lower rate of 15%. Besides, eligible individuals can claim the credit directly from their income tax returns. There are no limits on how many times an individual can claim this credit or how much can be claimed. To learn more, read our blog on the medical expense tax credit here.