Claiming medical expenses

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Instructions

1. Open the tax software
2. Review the Background information and Required slips (tax slips, receipts, etc.)
3. Provide all required information for the appropriate sections of the tax software
4. Once completed, compare your results with the solution provided
5. Afterwards, refer to the Takeaway points

Background information

Situation

Michael Schneider and Elizabeth Jones-Schneider are married and live with their son, Jack. They also support Elizabeth's father, Adam Jones, who lives in a low-income housing apartment. Michael works for the XYZ Inc. company and Elizabeth has a part-time job at Sunny Grocers. Their son, Jack, has no income to report and Elizabeth's father, who is widowed, receives Canada Pension Plan benefits and Old Age Security payments. Mr. Schneider has provided you with all of his slips and medical receipts. Although you are only expected to transmit the tax returns for Michael and Elizabeth, you must still provide complete information for Adam.

Identification information

Identification information

Name	Michael Schneider
Social insurance number (SIN)	000 000 000
Address	123 Main Street City, Province  X0X 0X0
Date of birth (DOB)	September 25, 1971
Marital status	Married to: Elizabeth Jones-Schneider SIN: 000 000 000 DOB: July 17, 1975
Dependant 1	Jack Schneider DOB: April 11, 2009 Relationship: son SIN: 000 000 000
Dependant 2	Adam Jones DOB: May 18, 1941 Relationship: Elizabeth’s father SIN: 000 000 000 Address: 300 Queen St Apt 14 City Province  X0X 0X0 Marital status: Widowed

Medical receipts provided

Adam:

• $1,500.00 – 2021-12-02 – Hearing aid – receipt indicates: 80% was reimbursed by a medical insurance plan. The amount was not claimed on a 2021 tax return.
• $600.00 – 2022-11-21 – Dental services – fillings and routine cleanings – receipt indicates: no amount was reimbursed

Jack:

• $3,500.00 – 2022-03-12 – Orthodontic braces – receipt indicates: $2,000 reimbursed by a medical insurance plan
• $850.00 – 2021-12-29 – Prescription eyeglasses – receipt indicates: $200 was reimbursed by a medical insurance plan. The amount was not claimed on a 2021 tax return.

Elizabeth:

• $550.00 – 2022-05-06 – Prescription contact lenses – receipt indicates: $200 was reimbursed by a medical insurance plan
• $300.00 – 2022-05-23 – Prescription for Vitamin B12 for Elizabeth's anemia – receipt indicates: 80% was reimbursed by a medical insurance plan

Michael:

• $800.00 – 2022-06-11 – Prescription drugs – receipt indicates: 80% was reimbursed by a medical insurance plan

Slips required

T4 – Statement of Remuneration Paid for Michael Schneider (XYZ Inc.)

Text version of the above image

T4 – Statement of Remuneration Paid
Protected B
Employer’s name: XYZ Inc.
Employee’s name and address:
Last name: Schneider
First name: Michael
123 Main Street
City, Province X0X 0X0
Box 12: Social insurance number: 000 000 000
Box 14: Employment income – line 10100: 27,500.00
Box 16: Employee’s CPP contributions – line 30800: 678.00
Box 18: Employee’s EI premiums – line 31200: 395.00
Box 22: Income tax deducted – line 43700: 2,385.00
Box 24: EI insurable earnings: 27,500.00
Box 26: CPP/QPP pensionable earnings: 27,500.00

T4 – Statement of Remuneration Paid for Elizabeth Jones-Schneider (Sunny Grocers)

Text version of the above image

T4 – Statement of Remuneration Paid
Protected B
Employer’s name: Sunny Grocers
Employee’s name and address:
Last name: Jones-Schneider
First name: Elizabeth
123 Main Street
City, Province X0X 0X0
Box 12: Social insurance number: 000 000 000
Box 14: Employment income – line 10100: 10,350.00
Box 16: Employee’s CPP contributions – line 30800: 334.00
Box 18: Employee’s premiums – line 31200: 151.00
Box 22: Income tax deducted – line 43700: 135.00
Box 24: EI insurable earnings: 10,350.00
Box 26: CPP/QPP pensionable earnings: 10,350.00

T4A (OAS) – Statement of Old Age Security for Adam Jones

Text version of the above image

T4A (OAS) – Statement of Old Age Security
Protected B
Issued by: Service Canada
Jones, Adam
14-300 Queen Street
City, Province X0X 0X0
Box 18: Taxable pension paid: 7,277.52
Box 21: Net supplements paid: 4,101.24
Box 12: Social insurance number: 000 000 000

T4A(P) – Statement of Canada Pension Plan Benefits for Adam Jones

Text version of the above image

T4A(P) – Statement of Canada Pension Plan Benefits
Protected B
Issued by: Service Canada
Jones, Adam
14-300 Queen Street
City, Province X0X 0X0
Box 20: Taxable CPP benefits: 10,200.00
Box 23: Number of months – retirement: 12
Box 12: Social insurance number: 000 000 000
Box 14: Retirement benefit: 10,200.00

Review your results

Solution to Claiming medical expenses.

Takeaway points

Steps to follow

1. Review their background information, required slips, and medical receipts
2. Verify the Details of medical expenses on Canada.ca
3. Click Add spouse next to the Family Head (Michael Schneider) tab
4. Click add dependant next to the Spouse (Elizabeth Jones-Schneider) tab to add each dependant
5. In both Michael and Elizabeth’s Interview setup, tick the box next to Medical expenses, disability, caregiver in the Common tax deductions section
6. In both Jack and Adam’s profiles, click Medical and disability in the left-side menu
7. Enter the eligible medical expenses into the profile of the family member who directly benefited from them
8. It is not necessary to enter each medical receipt individually; enter See list in the description and indicate the total amount of eligible medical expenses

In this case, although amounts paid for vitamins are generally not eligible medical expenses, vitamin B12, when prescribed by a health care professional is considered eligible.

In this case, the medical receipts paid in December of 2021 may be claimed on the 2022 tax return since they were paid within the 12-month period ending in the year the tax return is being submitted for and were not previously claimed.

The eligible medical expenses claimed must be reduced by any amount that has been reimbursed.

The tax software determined it is more beneficial to claim all the medical expenses for the family in Michael’s tax return. Michael is eligible to claim the medical expenses paid for Adam even though he does not live at the same residence because Adam is Elizabeth’s father and depends on them for support.

Since Michael earns a modest working income and is claiming a large amount of medical expenses for his family, he is eligible for the refundable medical expense supplement (line 45200). The tax software automatically calculates and claims the amount on line 45200.

For more information, refer to UFile instructions.