Health insurance premiums tax deduction
Apr 1, 2015
Apr 1, 2015
Spring comes every year, and so do taxes: time to gather up our paperwork and find answers to some big questions. Will I get a refund this year, or will I have to pay more? The key to being ready for tax time is actually quite simple: get all the information and refer any questions to a qualified professional.
When it comes to medical expenses, most Quebecers know that what they spend on dental care and medical equipment is tax-deductible. But did you know that your individual health insurance premiums are also eligible for a tax deduction? Take the time to get the full story from Revenu Québec and the Canada Revenue Agency, and you just may be in for a pleasant surprise when you total up the year’s medical expenses. Remember to carefully save all receipts to get the full deduction you’re entitled to.
To learn more about eligible medical expenses refer to the Canada Revenue Agency and Revenu Québec websites.
In order to be eligible, medical expenses must add up to more than 3% of net income for the year. This means it’s often best to deduct the whole family’s medical expenses—including a spouse and all dependents—on the return of the spouse reporting the smaller income. Make sure all expenses are claimed on a single return. Your private health insurance plan can entitle you to a larger refund (or a smaller balance owing), savings that can nicely offset what you spent in health insurance premiums.
When adding up eligible medical expenses, remember to include the following:
Bear in mind that some medical expenses are not eligible, such as gym memberships, certain supplements and health products, natural foods, and contributions to the Régie de l’assurance Maladie du Québec (RAMQ) such as the Health Services Fund. See the full list on the Canada Revenue Agency website.
Remember that eligible expenses can change from one year to the next, so when you do your research make sure to check for the right year.
Self-employed workers, who don’t have access an employer’s group insurance plan, are in a different boat than salaried employees. If you’re self-employed, you should know that you can deduct your private health insurance premiums from your self-employed income instead of reporting them as a medical expense (see TaxTips.ca). This strategy can net you significant tax savings (at least equivalent to what you spent in premiums) and non-taxable benefits if you are employed by a small business.
Blue Cross health insurance premiums are considered eligible medical expenses under the Canadian Income Tax Act. Get a quote today to learn more about the various options available from Blue Cross.