Are Medical Alert Systems Tax Deductible in Canada?

Every senior citizen should have a medical alert system installed in their homes. However, not all can afford the cost of one. Most seniors are independent people living on a minimal retirement income or tight budget. They are always looking for ways to save money. Thus, getting a medical alert system would only incur extra expenses. Little wonders why this question is frequently being asked, are medical alert systems tax deductible? Perhaps you are a senior citizen staying in Canada, or you are a loved family member to one. You are thinking of getting an alert system. And you are probably wondering if this medical expense is tax-deductible.

Do Medical Alert Systems Qualify as a Tax Deductible Medical Expense?

In the list of eligible medical expenses, medical alert systems are not explicitly included or stated as a tax deductible medical expense.

The monthly, annual, or installation cost of medical alert systems from Galaxy Medical Alert Systems, Life Assure, or Telus Health cannot be deducted from your gross income for tax purposes. As these systems are purely used for additional security and safety and aren’t considered a necessity and cannot be claimed. 

Other Tax Deductible Medical Expenses

In Canada, medical alert systems is not listed in the eligible medical expenses you can claim on your tax return. However, other medical expenses you may be able to claim to help your taxes.

According to the Canada Revenue Agency (CRA), medical expenses that qualify for the medical expense tax credit include devices, equipment, and supplies prescribed by a medical practitioner, and paid for in the taxation year.

It’s important to note that the medical expense tax credit is a non-refundable tax credit, which means that you can only use it to reduce the amount of tax you owe, but you cannot receive a refund for any unused portion of the credit. Additionally, the medical expense tax credit is subject to certain rules and limitations, so it’s a good idea to consult with a tax professional or the Canada Revenue Agency for more information.

Should You Claim A Medical Expense Deduction?

In Canada, you can claim medical expenses on your income tax return for any 12-month period ending in the tax year. This 12-month period is commonly referred to as the “period of eligibility.” You can choose any 12-month period that ends in the tax year, as long as you have not already claimed those expenses in a previous year.

For example, if you are filing your 2022 income tax return, you could choose any 12-month period that ended in 2022 as your period of eligibility. This could be from January 1, 2021, to December 31, 2021, or any other 12-month period that you prefer.

It’s important to note that you can only claim expenses that were paid within your period of eligibility. Additionally, you cannot claim expenses that were reimbursed by an insurance plan or another party. You can only claim the portion of the expense that was not reimbursed.

How To Claim Medical Expenses Deductions

If you are certain that your medical expenses deductions would significantly impact the amount of tax you pay. Then you can claim eligible medical expenses on line 33099 and 33199 of your tax return. 

Line 33099 involves medical expenses incurred for yourself and your partner for that year. Also the medical expenses for your dependent children under 18 fall in this group.

Line 33199 involves medical expenses incurred for other dependents such as children who were 18 or older at that year. Also any family relatives depending on you for medical care, such expenses are categorized in this group. Such relatives must be residents of Canada at any time in the year.

o claim a medical expense on your income tax filing in Canada, you will need to follow these steps:

1. Obtain a prescription from a medical practitioner: The medical expense must be prescribed by a medical practitioner as a necessary medical device to ensure the safety and health of an individual.
2. Keep your receipts: You will need to keep your receipts as proof of payment for the medical expense.
3. Calculate your medical expense tax credit: To calculate your medical expense tax credit, you will need to add up all eligible medical expenses paid in the taxation year. The total amount of eligible medical expenses must be more than 3% of your net income, or $2,397, whichever is less.
4. Enter the amount on your income tax return: On your income tax return, enter the total amount of eligible medical expenses on line 33099. The medical expense tax credit is a non-refundable tax credit, which means that it can only be used to reduce the amount of tax you owe. The credit will be calculated as 15% of the amount that exceeds the lesser of $2,397 or 3% of your net income.
5. Keep your records: Keep all supporting documents, such as receipts and prescriptions, in case the CRA requests them for verification.

How Is Medical Expense Tax Credit Calculated?

The Medical Expense Tax Credit in Canada is a non-refundable tax credit that can be used to reduce the amount of federal tax you owe. The amount of the credit is calculated as 15% of the total eligible medical expenses that exceed the lesser of $2,397 or 3% of your net income for the tax year.

Here is a sample of how to calculated the Medical Expense Tax Credit:

1. To calculate the Medical Expense Tax Credit, add up all eligible medical expenses paid in the tax year.
2. Subtract the lesser of $2,397 or 3% of your net income from the total eligible medical expenses.
3. Multiply the amount over the threshold by 15%. Enter the credit amount on line 33099 of your federal tax return.

What If My Medical Alert System Is Not Tax Deductible?

Other ways to get the cost of a medical alert system covered or partially covered is by involving other programs offered by the government (federal and provincial), or using private insurance. Here are a few options to consider:

• Health Spending Account (HSA): If you have a Health Spending Account through your employer or as a self-employed individual, you may be able to use the funds in your account to pay for a medical alert system. Private insurance companies will vary in terms of policies and what they will or will not accept as a medical or health expense. Please check with your provider.
• Disability Tax Credit (DTC): If you or a dependent have a severe and prolonged impairment in physical or mental functions, you may be eligible for the Disability Tax Credit. If you are eligible for the DTC, you may be able to claim the cost of a medical alert system as a medical expense on your income tax filing.
• Provincial/Territorial Programs: Some provinces and territories in Canada have programs that provide financial assistance for home health care equipment, including medical alert systems. Depending on where you live, you may be able to receive a subsidy or tax credit for the cost of a medical alert system.

Summary

Canadians interested in getting a medical alert system may discover that these systems are not explicitly listed under the eligible medical expenses tax-deductible. However, they can be necessary devices for seniors who live by themselves or who may need that extra security and protection. They are not an overly expensive cost per month; as well, some of these companies producing medical alert systems make affordable and quality systems. Thus, you don’t have to spend a lot on getting an alert system. Look around and find brands that offer budget-friendly alert systems that suit your needs and budget.