Medical Expenses: Organize Receipts Before Filing
Gather receipts in the eligible person’s name and choose the most advantageous twelve-month period.
In this article
A family's medical expenses often end up in a drawer, then in a bag at the accountant's. That method leaves money on the table every year. Three moves change the result. First sort by eligible person: receipts can be claimed for you, your spouse and dependants, each in the right person's name. Next subtract insurance reimbursements. Only the unreimbursed portion counts, so reconcile the insurer's statements against the receipts. Verify eligibility against the official list: physiotherapy is on it, vitamins are not, and medical mileage follows its own rules. Finally choose the period, a lever often ignored. The claim can cover any twelve-month period ending in the year. Shifting the window to include a major expense sometimes changes the result notably, because the income-based threshold is crossed more easily on a heavier period. This article explains how to file receipts through the year and calculate the best window.
Group the receipts under the right person
Medical expenses are claimed for yourself, your spouse and dependants, and receipts must carry the name of the person who received the care. It is generally advantageous to group them on one spouse's return. Only expenses above a threshold calculated on income qualify. Concentrating the expenses with the lower-income spouse lowers that threshold and increases the credit. Redo this calculation each year, because incomes change. Also keep all the household's receipts in one place.
Choose the twelve-month period
The rule that most often escapes people is the period. Expenses are claimed over any twelve-month period ending in the tax year, not necessarily the calendar year. That flexibility lets you group into one period significant expenses that straddled two years. The total can then exceed the threshold, where two separate claims would both fall below it. Try several twelve-month windows against the receipts' actual dates. The exercise takes half an hour and is sometimes worth several hundred dollars.
Subtract what was reimbursed
Only the unreimbursed portion qualifies. Subtract the share paid by group or individual insurance, and use the insurer's settlement statements to establish the net amount. A thousand-dollar dental bill reimbursed at eighty percent leaves two hundred dollars claimable. Premiums an employee pays to a private health insurance plan are themselves eligible expenses. They are often forgotten, though they appear on the year-end statement. A method that works: file the receipts as they arrive, with the corresponding insurance statement stapled to each.
Verify eligibility against the official list
The list of eligible expenses is broader than most people assume. It includes travel costs to obtain care unavailable nearby, certain devices, various professional services and attendant care. It excludes, by contrast, expenses that seem medical, such as many over-the-counter products, certain supplements and part of the wellness services. Some expenses require a prescription or a written certification to qualify. Get that document at the time of service rather than a year later at filing time. Asking the practitioner for it at the counter takes ten seconds. Obtaining it retroactively from a clinic that has since changed systems can take weeks, and sometimes fails. Clinics rarely keep those records long.
Quebec scenario
In the kitchen drawer of a family in Roberval, a whole year of medical expenses piles up loose: the eldest's orthodontics, the youngest's glasses, the father's physiotherapy, prescriptions, mileage to appointments in Chicoutimi. Every spring the drawer empties into a bag and the bag goes to the accountant, who extracts what he can. This year the mother decides to prepare rather than hope, and the result changes. First, sorting by eligible person. Receipts can be claimed for her, her spouse and the dependent children, each in the right person's name. The orthodontics billed in the teenager's name attaches to the family file without difficulty. Next, the subtraction, which prevents bad surprises. Group-insurance reimbursements get deducted: only the unreimbursed portion counts. She reconciles the insurer's statements against the receipts one by one. Then the eligibility check, against the official list rather than the rumour mill. Physiotherapy is on it, over-the-counter vitamins are not, and medical mileage follows its own distance and calculation rules. Last, the choice of period, the lever almost nobody uses. The claim can cover any twelve-month period ending in the year. By shifting the window to include January's orthodontic instalment, she adds $1,850 to the total. The family-income threshold is crossed, and the credit applies on both sides, federal and provincial. The drawer is still there, but a divider per person keeps it in order. Next year the preparation will take an hour.
Checklist
- Sort the receipts by eligible person
- Reconcile the insurance reimbursements one by one
- Count only the unreimbursed portion
- Verify each expense against the official list
- Apply the medical mileage's own rules
- Choose the most profitable twelve-month window
- Shift the window to capture the big expenses
- Check the income-based threshold
- Install a per-person divider for next year
The questions we get
A question about your situation?
A Quebec broker answers, with no commitment.
Read next
// Budget and debt
Bonus, Refund or Inheritance: Apply a Lump Sum to Debt
Establish the net amount actually available, then rank the debts by cost and urgency before applying it.
// Tax
Moving Expenses: Verify Eligibility and Keep Evidence
Verify the distance and the connection with work, study or business, then keep every expense receipt.
// Tax
Marginal and Average Tax Rates: Read a Tax Estimate
The average rate divides total tax by income; the marginal rate applies only to the next slice of income.