Claiming Medical Expenses on Your Tax Return – A Complete Guide by a Montreal CPA Firm Near You

Introduction

Claiming medical expenses in Canada is one of the most valuable tax strategies available to individuals and families, yet it is also one of the most misunderstood. The medical expense tax credit allows Canadians to reduce the taxes they owe by claiming eligible out-of-pocket medical and dental costs for themselves, their spouse, and dependants. However, many taxpayers miss deductions, claim ineligible expenses, or fail to organize receipts properly, resulting in reassessments or audits. Understanding how claiming medical expenses in Canada works, which expenses qualify, how the threshold is calculated, and what documentation CRA requires can significantly increase your refund and protect you during a CRA medical review. This guide explains the rules, the claim period, eligible expenses, common mistakes, and how to properly claim medical expenses on your tax return.

Legal and Regulatory Framework

The medical expense tax credit is governed by section 118.2 of the Income Tax Act, which defines which medical expenses are eligible and establishes the criteria for claiming medical expenses in Canada. Eligible expenses must be paid for medical services or products prescribed by a medical practitioner recognized by law. CRA’s regulations specify the types of prescriptions, devices, therapies, and professional services that qualify. Medical expenses must exceed the lesser of 3% of the taxpayer’s net income or a fixed threshold amount set annually by CRA. Taxpayers may use any 12-month period ending in the tax year to maximize their claim, giving flexibility for timing medical surgeries, dental procedures, or major health expenses. Receipts must be retained, and CRA may require proof of payment and prescriptions during a medical expense review. Revenu Québec applies parallel rules under the Taxation Act, with a similar threshold and documentation requirements.

Key Court Decisions

Several court cases highlight the importance of proper documentation and adherence to CRA rules when claiming medical expenses in Canada. In Morrell v. The Queen, a taxpayer claimed alternative therapies without proper prescriptions; the court upheld CRA’s denial, confirming that the Income Tax Act requires prescribed treatment from an authorized practitioner. In Campbell v. Canada, CRA denied dental and orthodontic expenses because receipts were incomplete, and the Tax Court ruled that taxpayers must maintain proper invoices, even when treatment is legitimate. In Zygmont v. Canada, a taxpayer attempted to claim travel expenses for medical treatment but failed to prove distances and necessity; the court upheld CRA’s decision, emphasizing strict compliance with documentation rules. These cases demonstrate that claiming medical expenses requires precision, proper receipts, and full understanding of CRA’s legal criteria.

Why CRA Targets This Issue

CRA frequently reviews medical expense claims because they are prone to misunderstanding and overstatement. Medical expenses represent one of the most commonly adjusted items during CRA reviews, especially when taxpayers include costs that are not eligible under the Income Tax Act. CRA pays particular attention to claims involving naturopathic care, private practitioners, assistive devices, travel for medical appointments, and large dental or surgery expenses. Claims with partially paid invoices, missing prescriptions, or unclear documentation are high-risk for reassessment. CRA also reviews medical expenses when amounts fluctuate significantly year to year or when expenses appear disproportionate to income. Because medical expenses reduce taxable income through a federal and provincial credit, CRA ensures every claim complies with the law. Understanding how CRA verifies medical expenses is essential to successfully claiming medical expenses in Canada without triggering a negative reassessment.

Mackisen Strategy

Mackisen CPA Montreal uses a structured, evidence-based approach to help clients maximize their medical expense tax credits safely and accurately. Our process begins by identifying all eligible expenses for the family unit, including dental surgery, orthodontics, prescription medications, fertility treatments, mental health services, medical devices, and travel costs for specialized care. We evaluate the 12-month period rule to determine the optimal claim window, ensuring maximum credit. We verify whether receipts include prescriptions, detailed invoices, provider information, and proof of payment. When clients have partial documentation, we assist them in obtaining missing records from medical offices or pharmacies. We issue clear guidance on which naturopathic, therapeutic, or alternative treatments qualify under CRA rules to avoid denied claims. For high-risk submissions, we prepare clients for potential CRA medical reviews and compile organized, compliant documentation to respond efficiently. This strategic approach minimizes CRA scrutiny and ensures taxpayers receive the full benefit of claiming medical expenses in Canada.

Real Client Experience

A client came to us after CRA denied their orthodontic expenses due to missing payment receipts. Although the treatment was legitimate, the clinic had provided only estimates and partial records. We contacted the provider, obtained full invoices and proof-of-payment statements, and filed a successful adjustment request restoring the full medical expense credit. In another case, a family undergoing fertility treatments had scattered receipts across multiple providers. We consolidated all documentation, optimized the 12-month period, and increased their tax credit by several thousand dollars. A senior client claimed travel expenses for medical treatment outside of Montreal but lacked mileage records. We recreated the travel log using hospital appointment letters, parking receipts, and mapping tools, allowing CRA to accept the expenses. These cases illustrate how professional support can make a major difference when claiming medical expenses in Canada.

Common Questions

Many taxpayers ask whether over-the-counter medications qualify. CRA requires that medications be prescribed by a medical practitioner and dispensed by a pharmacist to be eligible. Another common question is whether cosmetic procedures qualify. Cosmetic procedures are generally excluded unless medically necessary. Canadians also ask whether receipts must be submitted with the return. Receipts are not required during filing but must be kept for six years in case of CRA review. Some taxpayers wonder whether massage therapy, acupuncture, or naturopathy qualify. These services qualify only if provided by practitioners recognized by provincial law. Others ask whether they can claim expenses for dependants who do not live with them. The answer is yes, provided the dependant relies on the taxpayer for support. These questions highlight the importance of understanding the detailed criteria for claiming medical expenses.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps Canadians stay compliant while recovering the taxes they’re entitled to. Whether you are claiming medical expenses, responding to a CRA review, or optimizing the medical expense tax credit for your family, our expert team ensures precision, transparency, and protection from audit risk.