April 30th is fast approaching, which means that if you haven’t already, you should probably start on your taxes.
As you’re filling out the paperwork and determining which deductions and benefits you are eligible for, here’s some great news from the Canada Revenue Agency.
Individuals with a valid physician’s order who purchase legal cannabis from a licensed producer can deduct their costs a medical expense. Because most insurance policies have yet to expand to accommodate medical marijuana (and the ones that have do so in a limited capacity), this is great news for patients who rely on medical cannabis for pain relief or management of serious, ongoing conditions.
Most medical cannabis patients pay for their prescriptions out-of-pocket. Depending on their conditions, this can be extremely costly over time. There are two main costs associated with medical cannabis: the cost of the flower, cannabis oil, or product itself and the cost of accessories to use the product (papers, pipes, vaporizers, etc.). The CRA allows patients to deduct the products themselves but not the accessories.
Eligible products include:
- Cannabis flower (fresh or dried)
- Cannabis plants
- Cannabis seeds
- Cannabis oils
How to Claim Medical Cannabis as a Medical Expense
To deduct these items, it’s crucial that patients maintain their receipts. While you don’t have to send these to the CRA, you will want to keep them for your records in case you are audited. Additionally, if you have someone else filing your taxes, you’ll need to provide them with receipts.
Like many deductions, the whole cost of medical cannabis is not deducted. Rather, patients can submit a percentage of their costs. To determine how much you are eligible to submit, first, gather your receipts and tally up your costs for eligible purchases. Combine that number with any other eligible medical expenses you are planning to claim.
If your filing a T1, enter your total eligible medical expenses on line 330. Next, you’ll need to determine whether 3% of your net income is less than $2,302. If 3% of your net income is lower than $2,302, subtract that number from your eligible expenses. If $2,302 is the lesser number, subtract that figure from your eligible medical expenses. The difference will go on the next line on your T1.
Be sure to check whether your province or territory offers additional credits as well.
Other Eligible Medical Expenses
Wondering what other medical expenses are deductible? Here are three that may surprise you.
Ambulances have a reputation for being expensive, however, they are an eligible medical expense. In addition, patients can claim a deduction for medical travel if they are unable to seek care for their conditions within 40 kilometers of their home. Individuals who must travel more than 40 km to a medical facility for care that is not available in their area can deduct the cost of public transit or driving. If you must travel more than 80 km one way to get medical care, you can claim accommodations and meals in addition to driving expenses. To do so, make sure to keep any necessary receipts. The amount that can be deducted varies, so check with your province or territory.
Deduct Gluten-Free Food?
You may be surprised to learn that those diagnosed with celiac’s disease can deduct the cost difference between gluten-free food, which tends to be more expensive, and conventional food options. Grocery store receipts will need to be saved in order to verify these expenses in case of an audit.
Costs Associated with a Learning Disability
Families who must purchase educational materials to support a child or adult with a learning disability can deduct some of those associated costs. Assistive devices and tutoring can both be deduced, as well as other expenses like talking books.
Disclaimer: Nothing in this article is meant to constitute tax advice