Can we claim psychological healthcare tax credits for our private expenses? Yes, but it is far from covering the costs.
The costs of consulting a doctor, treatments, surgeries, and tests carried out in a private clinic give rise to a tax credit of 32.5% (Quebec 20%, Ottawa 12.5%), in the same way than all other eligible medical expenses (dentist, medication, physiotherapy, eyeglasses, etc.).
However, don’t rely on this non-refundable tax credit to lighten your private care bill, as you have to spend hundreds or even thousands of dollars before taking advantage of this relief. Since nothing is simple in taxation, here is how the tax credits for medical expenses are calculated at both levels of government, based on the 2015 tax tables.
At the federal level, you can obtain a non-refundable tax credit corresponding to 12.5% of the medical expenses incurred by you, your spouse, and your dependents. The applicable tax credit is calculated by subtracting the lesser of 3% of your net income or $2,208 from the total amount of eligible medical expenses. So, if you earn $100,000 and paid $4,000 in medical expenses for the whole family, you will qualify for a tax credit of 12.5% of $1,792 ($4,000 – 2,208 $), or $224.
“At the federal level, it may be more interesting to apply this tax credit to the spouse with the lowest income, because he will thus obtain a higher tax credit”, explains Sylvain Fontenelle, senior tax director at Demers Beaulne. For example, a person who earns $35,000 and has spent $4,000 on medical expenses will receive a tax credit of $368.75. How? By subtracting $1,050 (3% of net income) from the total expenses and multiplying the resulting amount by 12.5%.
At the provincial level, the calculation is done differently. You are eligible for a tax credit equivalent to 20% of medical expenses incurred by you, your spouse, or your dependents if they exceed 3% of your net family income. Thus, if your net family income is $120,000, your health care expenses through psych evaluation near me must exceed $3,600 to qualify for a tax credit. For example, if you paid $4,000 in medical expenses, then you would be entitled to 20% of $400, which gives tax relief of $80.
In Ottawa as in Quebec, you can include in your medical expenses the contributions paid to the Quebec drug insurance plan and to your group medical insurance plan (at the federal level, however, the employer-paid portion of your group medical insurance is excluded). As a general rule, medical expenses paid outside the country are eligible, as is laser vision correction. On the other hand, the costs related to cosmetic surgery, Botox, and company, are not.
Covered or not covered?
Expenses related to medical procedures already covered are never covered by complementary insurance policies. Therefore, it is impossible to obtain a total or partial reimbursement for the consultation of a family doctor or for a knee, hip, and cataract operation.
However, your insurance can reimburse miscellaneous costs related to private health care such as the room during convalescence, medication, and the wheelchair. “As for laboratory tests, they are not reimbursed elsewhere in the country, but are often reimbursed by San Diego insurers,” explains Suzie Pellerin, of the Canadian Association of Life and Health Insurance Companies (CLHIA).