Tax credits for medical expenses, people with disabilities, and caregivers
The tax filing deadline for most Canadians each year is at the end of April, but it’s not too early to start thinking about the process if you have arthritis or provide care for someone who does. You may be eligible for certain tax credits, such as disability tax credits or medical expense credits, including for medical cannabis.
“One of the big things people don’t realize is that with [claiming] medical expenses, you are confined to a 12-month period, but it doesn’t have to be January to December,” says Barbara Eckert, a bookkeeper in Toronto. You can claim medical expenses paid in any 12-month period ending in the current tax year and not claimed the previous year, such as June-May. Federal and provincial/territorial medical expenses must be claimed for the same time period, though.
Eckert adds that caregivers to someone living with arthritis may also be able to claim tax credits, and some over-the-counter medications, such as anti-inflammatories, can be claimed if your healthcare provider writes a prescription for them.
While applying for or claiming tax credits may feel a little daunting, it’s well worth considering it to save yourself money. If you’re working with an accountant or bookkeeper, be sure to ask about their experience in this area.
Below is a list of tax credits for which you may be eligible. Further information can be found in the Canadian Revenue Agency’s (CRA) guide to Tax Measures for Persons with Disabilities: Disability-Related Information, available in web format and PDF format. You can also visit the CRA website to order alternate formats for persons with disabilities or call 1-800-959-8281.
Non-refundable tax credits
These types of credits reduce the amount of income tax you have to pay.
Disability Tax Credit (DTC)
Eligibility criteria: The parameters are fairly strictly defined, so visit the CRA’s webpage on Eligibility criteria for the disability tax credit for more information. A person may be eligible if they have “an impairment in physical or mental functions that is severe and prolonged, resulting in a marked restriction” and the impairment meets certain criteria under one or more of the following categories:
eliminating (bowel and bladder functions)
mental functions necessary for everyday life
cumulative effect of significant limitations
For example, eligible impairments related to walking may include if you rely on a wheelchair outside the home or if you are unable to walk 100 metres. In terms of dressing, this may include if you require assistance from another person to dress yourself or if it takes you three times longer than average to dress yourself daily. If you are a caregiver, you may be able to claim a portion of the disability tax credit for a spouse or a dependant (for example, your child or your parent).
How to apply: Visit the CRA’s Disability Tax Credit webpage for more information about qualifying and applying. Qualifying for the DTC will require that you and your medical practitioner complete a T2201 form indicating the severity of your restrictions and their impact. A DTC application needs to be approved by the Canadian Revenue Agency before you can claim the credit.
Canadian Caregiver Credit (CCC)
Eligibility criteria: This credit helps caregivers with the expenses involved in taking care of their spouse, common-law partner or dependant who has an impairment in physical or mental functions. The amount a person is able to claim will depend on their relationship to the person for whom they are claiming the credit, their circumstances, the person’s income and whether other credits are being claimed for that person.
How to claim: For more information on the amount you can claim and how to fill out your tax return accordingly, visit the CRA’s Canadian Caregiver Credit webpage. You may also be asked to submit a signed statement from a medical practitioner.
Medical Expenses (including medical cannabis)
Eligibility criteria: Refer to the Government of Canada’s website for a list of Eligible medical expenses you can claim on your tax return. This can include items such as braces for a limb, orthopedic shoes, boots and inserts, as well as walking aids. Check to see if a prescription is required. Eligible expenses also include medical cannabis. To claim medical cannabis as an expense, individuals must possess a medical document and purchase their cannabis from a federally licensed seller with whom they are registered. Additional areas of medical expenses may include care, treatment and training; construction and renovation; devices, equipment and supplies; gluten-free food products (for people with celiac disease); prescribed drugs, medications and other substances; service animals; services and fees; as well as travel expenses (Government of Canada, 2021).
How to claim: According to the CRA, “you can claim eligible medical expenses on line 33099 or line 33199 of your tax return (Step 5 – Federal tax).” For more information, visit the CRA’s guide to Medical Expenses 2021.
Home Buyers’ Amount
Eligibility criteria: An individual may be able to claim up to $5,000 on line 31270 of their tax return if they or their spouse/common-law partner purchased a qualifying home during the tax year and they are first time home-buyers. You do not need to be a first-time home buyer to claim this credit if you have been approved for the Disability Tax Credit Certificate in the relevant year or if the home was purchased for a relative who has been approved for the DTCC, as long as the home is more accessible or better meets the needs of the person with a disability.
How to claim: Visit the CRA website for more details about Line 31270: Home buyer’s amount.
Home Accessibility Expenses
Eligibility criteria: If you are 65 years of age or older or have been approved for the Disability Tax Credit, you may be able to claim up to $10,000 per year if you own a home in Canada and paid for eligible renovations to improve the safety or accessibility of your home. You may also be able to claim this credit on your tax return for a dependent if you meet certain criteria. “The renovations must be permanently part of the home and meet one of the following criteria: allow the person to gain access to the home or be mobile or functional within the home [or] reduce the risk of harm within the home or in accessing the home,” says the CRA.
How to claim: Visit Line 31285: Home accessibility expense on the CRA’s website for further details.
Refundable tax credits
These types of credits reduce the amount of tax you owe and could result in a refund.
Refundable Medical Expense Supplement
Eligibility criteria: If you are working, have low income and have high medical expenses, you may be eligible to claim up to $1,285 for refundable medical expenses, says the CRA. You must meet all of the eligibility criteria listed on the CRA website to claim this credit.
How to claim: The CRA’s webpage on Line 45200: Refundable medical expense supplement can provide further information.
Canada Workers Benefit (CWB)
Eligibility criteria: You may be eligible for the Canada Workers Benefit if you are a low-income individual or family who has earned income from employment or business during the tax year. The CWB includes a basic amount and a disability supplement. You may be able to claim a CWB disability supplement if you are eligible for the Disability Tax Credit and you had income from work in the tax year.
How to claim: Visit the CRA website to learn more about Line 45300: Canada workers benefit
Other tax measures
Child Care Expenses
Eligibility criteria: If you or your spouse/common-law partner paid for childcare for a child under the age of 16 or with an impairment in physical or mental functions, you may be able to claim these expenses on your tax return. However, the expenses must have been paid so that you or your spouse/common-law partner “could be employed, carry on a business, go to school, or conduct research in 2021,” according to the CRA. Generally, these expenses can only be claimed by the person with the lower net income, unless this person was unable to care for children because of an impairment in physical or mental functions.
How to claim: Learn more about Line 21400 – Child Care Expenses on the CRA’s website.
Disability Supports Deduction
Eligibility criteria: Individuals who have an impairment in physical or mental functions may be able to deduct expenses paid during the year to enable them to work, go to school or conduct research funded by a grant. For example, expenses such as attendant care, job coaching, note-taking services and voice recognition software may be eligible. Some expenses may require eligibility for the Disability Tax Credit and/or that a medical practitioner verify the need.
How to claim: The webpage Line 21500 – Disability Supports Deduction can provide further information.
Child Disability Benefit
Eligibility criteria: If you receive the Canada Child Benefit (CCB) for a child who has been approved for the Disability Tax Credit Certificate (Form T2201), you may be entitled to the Child Disability Benefit. This benefit is based on family net income and you could be eligible for up to $242.91 per month.
How to claim: If you are already receiving the Canada Child Benefit for a child who is eligible for the Disability Tax Credit, you don’t need to apply separately for the Child Disability Benefit, you will receive it automatically. You can learn more on the Child Disability Benefit webpage or by calling 1-800-387-1193.
Specially Equipped Motor Vehicle GST/HST Rebate
Eligibility criteria: If you purchased a specially equipped vehicle or modified an existing vehicle for accessibility purposes, you may be eligible for a partial rebate on the GST/HST you paid, within four years of purchase. A qualifying vehicle includes “a motor vehicle that is equipped with a device designed exclusively to assist in placing a wheelchair in the vehicle without having to collapse the wheelchair, or with an auxiliary driving control to facilitate the operation of the vehicle by an individual with a disability” according to the CRA.
How to apply: To download a PDF copy of the application form, visit the CRA’s webpage GST518 GST/HST Specially Equipped Motor Vehicle Rebate Application.
Eligibility criteria: According to the CRA, “If you have a permanent mobility impairment and cannot safely use public transportation, you can ask for a refund of part of the federal excise tax on the gasoline you buy. A qualified medical practitioner must certify the impairment.”
How to apply: Submit Form XE8, Application for Refund of Federal Excise Tax on Gasoline. Visit the CRA webpage on the Excise gasoline tax refund for more information.
Expenses for medical services not available in your area
Eligibility criteria: If you live in Québec, you may be eligible to claim travel and lodging expenses for medical services not available in your area within 200 kilometres of your home; or moving expenses paid to move to within 80 kilometres of a health establishment in Québec located 200 kilometres or more from your former home.
How to apply: Visit the Revenu Quebec website and check the information for Line 378: Expenses for medical services not available in your area for more details.
Registered Disability Savings Plan
Details: This plan is intended to help parents and others “save for the long-term financial security of a person who is eligible for the Disability Tax Credit,” according to the CRA. Contributions to the plan can be made until the end of the year the beneficiary turns 59 and are non-tax-deductible.
Learn more: Registered Disability Savings Plan (RDSP)
Students with Disabilities
Details: Part-time students with a disability may be eligible for education-related benefits that require full-time student status (such as a scholarship exemption) if:
they are eligible for the Disability Tax Credit, and
they have an impairment in physical or mental functions that a medical practitioner has certified in writing would prevent them from participating in full-time studies.
Learn more: Students
Home Buyers’ Plan
Details: This program allows you to withdraw up to $35,000 from your Registered Retirement Savings Plans (RRSPs) without penalty to buy or build a qualifying house for yourself or a relative with a disability. You then have up to 15 years to pay back the withdrawn funds. You must be a first-time homebuyer if purchasing a home for yourself, or you must have a written agreement to buy or build a qualifying home for a person with a disability. Additional conditions apply.
Learn more: How to participate in the Home Buyers’ Plan (HBP)
Community Volunteer Income Tax Program
Feeling overwhelmed about completing your tax return? Not sure where to start? Some individuals may qualify for a free tax clinic offered by volunteers in your community if you have a “modest income” (below $35,000 for individuals or below $50,000 for a household of four, for example) and a “simple tax situation” (no income or income comes from employment, pension, benefits, RRSPs, support payments or scholarships). Visit the CRA website to learn more About free tax clinics or to Get your taxes done at a free clinic, if eligible.
To learn more about federal and regional sources of funding for persons with disabilities, including tax credits, employment services and job training, as well as funding for assistive devices or medical equipment, visit the Arthritis Society’s Financial Wellness Guide.