What Is the Medical Expenses Tax Credit?
The Medical Expenses Tax Credit (METC) is a non-refundable federal tax credit available to Canadian taxpayers who incur significant out-of-pocket medical expenses during the year. Unlike many credits, the METC is not a fixed amount — it is calculated based on your actual eligible medical expenses, subject to a threshold that must be exceeded before any credit is earned.
Pathak Professional Corporation in Mississauga helps clients identify and claim all eligible medical expenses on their annual T1 returns. Call 437-872-7399.
How the Medical Expenses Tax Credit Is Calculated
The federal METC is 15% of your eligible medical expenses that exceed the lesser of:
- $2,759 (2025 threshold, indexed annually), or
- 3% of your net income (Line 23600 of your T1)
Example: You have $8,000 in eligible medical expenses, net income of $80,000.
- Threshold: lesser of $2,759 or ($80,000 × 3% = $2,400) = $2,400
- Eligible for credit: $8,000 − $2,400 = $5,600
- Federal credit: $5,600 × 15% = $840
- Ontario provincial credit: $5,600 × 5.05% ≈ $283
- Total tax reduction: approximately $1,123
Key strategy — use the lower-income spouse’s return: The 3% threshold is lower for lower-income spouses. If one spouse earns $40,000, their threshold is only $1,200 — allowing more expenses above the threshold to generate a credit. You can claim all family medical expenses on ONE spouse’s return, and it is usually most beneficial to claim on the lower-income spouse’s T1 (subject to having sufficient tax owing to absorb the non-refundable credit).
What Medical Expenses Are Eligible for the CRA Credit?
| Expense Type | Eligible? | Notes |
|---|---|---|
| Prescription drugs and medications | ✅ Yes | Must be prescribed by a medical practitioner; OTC medications do NOT qualify |
| Dental treatments | ✅ Yes | Fillings, crowns, root canals, orthodontics, dentures; cosmetic procedures generally excluded |
| Eyeglasses and contact lenses | ✅ Yes | Prescribed; laser eye surgery qualifies; cosmetic contacts do not |
| LASIK surgery | ✅ Yes | Qualifies as a medical expense |
| Physiotherapy and chiropractic | ✅ Yes | Must be prescribed or referred by a medical practitioner in most cases |
| Psychologist and mental health therapy | ✅ Yes | Fees paid to a licensed psychologist or therapist |
| Hospital costs | ✅ Yes | Including private rooms if medically necessary |
| Home care and attendant care | ✅ Yes (limited) | For individuals with qualifying disabilities; specific CRA rules apply |
| Medical devices (hearing aids, wheelchairs, CPAP) | ✅ Yes | Prescribed; maintenance costs may also qualify |
| Fertility treatments (IVF, etc.) | ✅ Yes | Qualifying medical procedures for fertility; some provinces provide additional credits |
| Travel for medical treatment | ✅ Yes (limited) | When no local treatment available; must travel 40km+; accommodation if 80km+ |
| Vitamins and supplements | ❌ No | Not eligible even if recommended by a doctor — not prescribed medications |
| Health club and gym memberships | ❌ No | Not eligible — even if doctor recommends exercise |
| Health insurance premiums | ✅ Yes | Premiums paid personally (not employer-paid); includes travel medical insurance |
| Cannabis (prescribed) | ✅ Yes | Amounts paid for medical cannabis authorized under the federal Access to Cannabis for Medical Purposes Regulations |
The 12-Month Claim Period: A Key Strategy
A critical planning tool for the METC: you do not have to use the calendar year. You can claim medical expenses for any 12-month period ending in the tax year. This means you can choose the 12-month window that produces the highest claimable amount above the threshold.
Example: You had $4,000 in dental expenses in November–December 2024 and $3,500 in additional expenses in January–October 2025. Instead of splitting these across two calendar years and potentially losing some to the threshold twice, you can claim the 12-month period November 2024 to October 2025 on your 2025 T1 — claiming $7,500 total and exceeding the threshold only once.
Provincial Medical Expense Credits
Ontario provides its own medical expense credit of 5.05% on eligible amounts over the threshold — calculated on the same base as the federal credit. Additionally, Ontario’s Refundable Medical Expense Supplement provides up to $990 (2025) for lower-income working individuals whose medical expenses are high relative to their income — this is refundable, meaning it is paid even if no tax is otherwise owed.
Frequently Asked Questions: Medical Expenses Tax Credit Canada
Can I claim dental expenses on my taxes in Canada?
Yes — dental expenses are one of the most commonly claimed medical expenses in Canada. Eligible dental expenses include: fillings, extractions, root canals, crowns, bridges, dentures, orthodontics (braces for medical necessity), and dental implants. The procedure must be performed by a licensed dentist. Purely cosmetic dental procedures (teeth whitening, veneers for aesthetic purposes only) are generally not eligible. Keep all your dental receipts and claim the expenses on Schedule 1 of your T1 (federal) and Schedule ON428 (Ontario) for the tax year in which you paid the expenses.
How much do medical expenses have to be to claim on taxes in Canada?
There is no minimum amount of medical expenses required to file a claim — but you will only receive a tax benefit if your total eligible medical expenses exceed the threshold: the lesser of $2,759 (2025) or 3% of your net income. At $60,000 net income, the threshold is $1,800 (3%). You earn 15% federal credit on every dollar above the threshold. For example, at $60,000 net income with $4,000 in eligible expenses: $4,000 − $1,800 = $2,200 eligible for credit × 15% = $330 federal credit. Ontario adds another 5.05% credit. It is always worth totaling up your eligible medical expenses — many people are surprised by how much they spend.
Are private health insurance premiums tax deductible in Canada?
Premiums you pay personally (not reimbursed by an employer or covered group plan) for private health and dental insurance are eligible medical expenses for the METC. This includes: individual health and dental plans purchased directly from an insurer, provincial health supplement plan premiums, and medical travel insurance. Add these premiums to your other medical expenses when calculating the total for the credit. Note that if your employer pays your health insurance premiums, those amounts are a non-taxable employment benefit and you cannot claim them — but if you pay your own premiums directly, they count toward the METC.
Can I claim mental health therapy costs on my taxes in Canada?
Yes — fees paid to a licensed psychologist or therapist for mental health treatment are eligible medical expenses in Canada. The practitioner must be duly authorized under provincial law to practice their profession. Fees paid to a registered social worker (RSW) with a specialization in psychotherapy, a registered marriage and family therapist, or a registered psychotherapist may also qualify depending on how they are licensed in your province. Keep receipts showing the practitioner’s name, credentials, and the services provided. If you pay for online therapy platforms (BetterHelp, etc.), the eligibility depends on whether the therapist is appropriately licensed — check with your CPA if you are unsure.
