MYTH: My insurance company covers most of my medical expenses; I don’t have enough out-of-pocket expenses to get a tax credit.
BUSTED: Medical insurance PREMIUMS are allowable medical expenses for tax purposes. In order to get a tax credit your expenses must be at least 3% of your income (or at least $2000 if your income is over $66k). Your expenses include any out-of-pocket expenses AND your medical insurance premiums.
QUESTION: “I pay about $100 / month for my insurance – why is it not on my T4?”
ANSWER: Your insurance premiums will rarely show up on a T4 (if it does, it’s in box 85) – however you can find your Year-To-Date total on the LAST paystub of the year. Add this amount to your total un-reimbursed expenses.
PROBLEM: I didn’t keep my prescription receipt ‘cause I thought I couldn’t claim them. Now what?
SOLUTION: Ask your pharmacist to give you a print-out for tax purposes. They’ll know exactly what you need and they’re used to it!
And the kicker…
Many tax credits are based on Net Family Income. Medical tax credits? Nope! This one’s based on the income of the person claiming it. So take all of your medical expenses, all of your spouse’s medical expenses, plus whatever you spent on the kids. Take the total amount and have the spouse with the LOWEST income claim the total amount to get the biggest bank for your buck!