Wants information on medical tax credit
Q – Could you please explain what the medical tax credit is and how is it is pegged to inflation. – P.E.B.
A – The medical credit is designed to provide some tax relief for people with high medical expenses. Unfortunately, the government has set the barrier so high that most families cannot make good use of it.
You are allowed to claim all out-of-pocket expenses that exceed $1,728 or 3% of net income (whichever is less). If you have a spouse or live-in partner, the lower-income person should make the claim because the hurdle will be reduced. A person with net income of $20,000 will be able to claim all family expenses in excess of $600, while someone earning $60,000 would only be able to claim medical costs in excess of $1,728.
You may use any 12-month period ending in 2002 to calculate your expenses. The list of allowable costs is extensive, and includes prescription medicines, dental work, glasses, hearing aids, diagnostic tests, and much more. You may also claim any premiums you paid for private health coverage, including travel health insurance.
Remember, only out-of-pocket amountmay be claimed. If you were reimbursed by any insurance, public or private, that amount must be deducted from the total claim. You will need supporting receipts.
You’ll find more details at Line 330 of the General Tax Guide.
All tax credits are adjusted annually to take account of increases in the cost of living. – G.P.