Can you deduct cannabis as a medical expense?
Changes to the medical expense tax credit expanded eligibility for patients carrying the cost of prescribed cannabis. Here is who qualifies and how much can be claimed.
The Government of Canada announced changes to the medical expense tax credit which expand eligibility for individuals who are faced with medicinal cannabis expenses.
Medical cannabis is cannabis that has been prescribed by a physician or other authorised practitioner for use in treating a patient for a range of medical conditions.
With cannabis in the early stages of its acceptance and legitimacy, many insurance companies deny claims from individuals for the cost of cannabis for medical use, and patients are often left carrying the expense. With these changes, individuals may be eligible to deduct these costs on their return.
Those who are eligible are able to claim the medical expense credit for payments made for cannabis, cannabis oil, cannabis plant seeds and other cannabis products.
In order to qualify
- You hold a medical document as defined in the Cannabis Regulations.
- You are registered as a client of the holder of a licence for sale.
- You make your purchases from the holder of the licence for sale you are registered with.
How much can you claim?
Individuals who qualify can claim up to the lesser of 3% of their net income and $2,352. Keep in mind that these credits are non-refundable. That means you can only offset tax otherwise owing on your return with the medical expense credit you are eligible for — any unused portion is not refunded to you.
Some low-income individuals or families may also qualify for the Refundable Medical Expense Supplement (RMES), which is aimed at those with high medical expenses and low incomes.
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