Montreal CPA Firm Near You – Medical Expense Tax Credits Explained (METC) in Canada

Medical expenses can significantly impact a family’s financial situation, especially with the rising cost of treatments, prescriptions, therapies, and specialized medical support. Understanding the Medical Expense Tax Credit (METC) is essential for maximizing your tax savings and ensuring you claim all eligible expenses. As a Montreal CPA firm near you, we help individuals, families, newcomers, and self-employed professionals navigate these important tax rules with clarity and confidence. The METC remains one of the most underutilized tax credits in Canada, often because taxpayers are unaware of which expenses qualify, how to calculate the credit, or how to apply the rules correctly.

What Is the Medical Expense Tax Credit (METC)?
The METC is a non-refundable tax credit that helps reduce the amount of federal and provincial income tax you owe by allowing you to claim eligible medical expenses for yourself, your spouse or common-law partner, and your dependent children. Although the credit is non-refundable, it lowers the taxes payable, which can represent significant savings for families with high medical costs or individuals with chronic conditions. Understanding this credit is vital because many everyday medical-related costs qualify, even ones you may assume are not covered.

Who Can Claim the METC?
Any Canadian taxpayer may claim eligible medical expenses for themselves and qualifying dependents. A dependent can include your spouse or common-law partner, your children under 18, and in some cases, other relatives who rely on you for financial support. In Quebec, provincial rules complement federal rules, and certain expenses may be claimed at both levels. Many Canadians incorrectly assume that only “major” or “hospital-based” treatments qualify; however, routine yet medically necessary expenses can also count, such as prescription eyeglasses or orthodontic work.

What Expenses Are Eligible?
Eligible medical expenses include a wide range of treatments, devices, medications, and therapies. These can include prescription drugs, dental care, eyeglasses, hearing aids, fertility treatments, laser eye surgery, wheelchairs, home accessibility renovations, and specialized therapies. Mental health services such as psychotherapy also qualify. Travel expenses for medical treatment may be deductible in specific circumstances, as well as medical insurance premiums. The challenge lies in knowing which expenses are claimable and ensuring the proper documentation is kept to support your claim.

The 12-Month Claiming Period Explained
You are allowed to choose any 12-month period ending in the tax year to calculate your eligible expenses, not necessarily the calendar year. This flexibility allows taxpayers to group expenses strategically. For example, if your family had significant medical treatments between September of one year and August of the next, choosing that period may maximize your claim. This strategy becomes particularly valuable when large, one-time expenses such as surgery, dental implants, or fertility treatments occur mid-year.

The Threshold (3% of Income) and How It Works
The METC only applies to medical expenses exceeding the lesser of either 3% of your net income or a preset annual amount defined by the CRA. Many people misunderstand this rule and assume their total medical bills must exceed thousands of dollars, but in fact, the threshold is proportional to income. For example, someone with $40,000 net income needs to exceed only $1,200 in eligible expenses to start receiving the credit. Lower-income families benefit from a lower threshold, making it easier to qualify for substantial tax relief.

How Medical Expenses Benefit Quebec Residents
In Quebec, taxpayers receive a provincial medical expense credit in addition to the federal one. Quebec’s rules can differ slightly, which is why many taxpayers fail to maximize their provincial credit. Quebec also offers the refundable tax credit for medical expenses for individuals aged 18 and over, which provides additional support for lower-income residents. A Montreal CPA with experience in both tax systems can ensure you take advantage of every credit and avoid mistakes when reporting amounts on your TP-1 return.

Examples of Commonly Missed Medical Expenses
Many taxpayers miss deductions simply because they overlook certain expenses. Among the most commonly missed are orthopedic shoes, sleep apnea equipment, service animal expenses, compression stockings, tutoring for children with learning disabilities (if medically prescribed), and travel expenses for medical specialists located more than 40 km away. Even medical cannabis purchased under a physician’s authorization is eligible. When in doubt, our firm reviews receipts and medical notes to identify every eligible expense.

How to Organize Receipts and Documentation
Proper documentation is essential. Taxpayers must keep all medical receipts, insurance statements, prescriptions, and travel logs in case the CRA requests verification. Many medical service providers offer digital receipts, which can simplify recordkeeping. Organizing expenses by family member and date makes the annual tax preparation process smoother. At Mackisen, we offer secure digital portals where clients can upload receipts year-round, reducing the stress of last-minute tax filing.

How the METC Benefits You Financially
The METC can reduce your overall tax bill significantly, especially if you or a family member has ongoing treatments or chronic medical needs. For families with high out-of-pocket medical costs—including dental, orthodontic, and psychological services—the credit can provide meaningful financial relief at tax time. Because the credit also applies to dependents, large families often have the most to gain. Quebec residents, in particular, can benefit from both federal and provincial credits being applied to the same expenses.

Practical Example of How the Credit Works
Imagine a family with $6,000 in eligible medical expenses in a chosen 12-month period. If the taxpayer’s income is $50,000, the threshold is 3% or $1,500. This means $4,500 is eligible for the federal credit, plus additional amounts for the Quebec provincial credit. At a combined effective rate of approximately 25–30% depending on the year, the savings could be well over $1,000. Many families are surprised by the size of their refund once expenses are properly aggregated.

Long-Term Tax Planning With Medical Expenses
Medical expenses can be planned strategically, especially for elective or non-emergency procedures. Spreading or consolidating expenses within a specific 12-month window can maximize financial benefits. Taxpayers who anticipate future treatments—such as orthodontics, fertility treatments, or mobility equipment—can schedule these expenses in a way that maximizes the credit. Coordinating with a CPA ensures your long-term medical spending aligns with your long-term tax planning.

Changes in Medical Expense Rules Over Time
Tax rules evolve, and certain expenses become eligible over time. Recent changes include expanded coverage for mental health professionals, fertility treatments, and medical cannabis. Quebec has also updated its rules regarding refundable credits for those with lower income. Staying informed is essential because missing updated credit categories can lead to lost savings. A CPA firm ensures your return reflects the most current rules.

How Medical Expenses Affect Seniors and Retirees
Seniors face higher medical costs as they navigate health issues, prescription medications, mobility aids, dental care, and assistive devices. Medical expenses become a key tax planning tool for retirees, especially when combined with pension income splitting and age credits. Seniors may also claim medical travel, home support services, and specialized care. Because many seniors live on fixed incomes, claiming the full credits available can significantly enhance after-tax income.

Medical Expenses for Dependent Relatives
Medical expenses for dependent relatives such as elderly parents or disabled adult children can also be claimed under certain conditions. This often includes nursing home fees, home care support, and medical devices. Understanding dependency criteria is essential to avoid mistakes. A Montreal CPA can help ensure you meet the eligibility rules and maximize the credits available to caregivers.

Medical Expenses for Newcomers and Non-Residents
Newcomers to Canada often struggle to understand eligibility rules, especially if medical treatments occurred outside the country. The METC may still apply to expenses paid abroad as long as they meet the criteria and are supported by proper documentation. For international students, temporary workers, and new residents of Montreal, maximizing medical expense claims can significantly reduce the tax burden.

How Medical Insurance Impacts Your Claim
Only out-of-pocket medical expenses can be claimed. If an insurance plan reimburses 80% of your costs, only the remaining 20% may be included. Many taxpayers mistakenly claim full amounts without subtracting insurance, resulting in CRA reassessments. Reviewing insurance statements and matching them with receipts ensures accurate reporting. At Mackisen, we perform this reconciliation for you to prevent errors.

Working With a CPA to Maximize Your Medical Expense Credit
A CPA can help identify eligible expenses, choose the best 12-month period, calculate thresholds, and file both federal and Quebec provincial tax returns accurately. Our expertise helps ensure no credits are missed and that your tax refund is maximized. For those with complex medical situations, dependents with disabilities, or high annual expenses, CPA guidance is essential for optimizing results.

Why Choose Mackisen

Choosing Mackisen means choosing accuracy, strategy, and peace of mind. We bring extensive experience helping individuals and families maximize medical expense tax credits and other important Canadian tax benefits. Our team ensures you claim every eligible expense, stay fully compliant with CRA and Revenu Québec rules, and reduce your tax burden legally and efficiently. We offer year-round support, digital recordkeeping, client-focused guidance, and clear explanations designed to make your tax filing experience stress-free. With Mackisen as your trusted CPA firm, you gain a knowledgeable partner dedicated to improving your financial well-being and ensuring you never leave money on the table.