Claiming medical expenses

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 low-income housing. Michael works for the XYZ Inc. company and Elizabeth has a part-time job at Sunny Grocers. Michael also received Advanced Canada workers benefit payments. Their son has no income to report and Elizabeth's father, who is widowed, receives Canada Pension Plan benefits and old age security payments. Adam’s medical expenses were paid for by Michael and Elizabeth. Mr. Schneider has provided you with all of his tax 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.

Medical receipts provided

Adam:

• $1,500.00 – 2023-12-02 – Hearing aid – receipt indicates: 80% was reimbursed by a medical insurance plan. The amount was not claimed on a 2023 tax return
• $600.00 – 2024-11-21 – Dental services – fillings and routine cleanings – receipt indicates: no amount was reimbursed

Jack:

• $3,500.00 – 2024-03-12 – Orthodontic braces – receipt indicates: $2,000 reimbursed by a medical insurance plan
• $850.00 – 2023-12-29 – Prescription eyeglasses – receipt indicates: $200 was reimbursed by a medical insurance plan. The amount was not claimed on a 2023 tax return

Elizabeth:

• $550.00 – 2024-05-06 – Prescription contact lenses – receipt indicates: $200 was reimbursed by a medical insurance plan
• $300.00 – 2024-05-23 – Prescription for Vitamin B12 for Elizabeth's anemia – receipt indicates: 80% was reimbursed by a medical insurance plan

Michael:

• $800.00 – 2024-06-11 – Prescription drugs – receipt indicates: 80% was reimbursed by a medical insurance plan

Slips required

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

RC210 – Advanced Canada workers benefit (ACWB) statement for Michael Schneider

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

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

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

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, on Canada.ca, whether the medical expenses are eligible or need a prescription
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 profiles, click T4 and employment income in the left-side menu and click the + sign next to T4 income (earned in any province except Quebec) in the T4 and T4E section to enter the required information
6. In Michael’s profile, click Other information slips in the left-side menu and click the + sign next to RC210 – Canada workers benefit advance payments statement [Federal line 41500] to enter the information from the tax slip
7. In both Michael and Elizabeth’s Interview setup, tick the box next to Medical expenses, disability, caregiver in the Common tax deductions section
8. In both Jack and Adam’s profiles, click Medical and disability in the left-side menu, then click the + sign next to Medical expenses for the dependant in the Medical expenses section 
9. Enter the eligible medical expenses into the profile of the family member who directly benefited from them
10. It is not necessary to enter each medical receipt individually, instead enter See list into the description field 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 2023 may be claimed on the 2024 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 on 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, depends on them for support and his medical expenses were paid for by Michael and Elizabeth.

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.