Open up and say 'Ah, tax credit': Medical tests could offer more than just health benefits
Been to a private medical clinic recently? Several such clinics, typically
found in major urban centres, offer "executive medical assessments."
The clinics offer time-strapped executives a private medical facility where
they can undergo a complete assessment of their current state of health. The
assessments are personalized, and can include a series of sophisticated tests
for vision, hearing and lung functions. The clinics can also evaluate a person's
diet and exercise regimen or stress levels.
The cost of these assessments can run about $1,500 or more.
While some employers may cover a portion (or even all) of the fees, "add-ons"
are generally not covered.
For example, along with its comprehensive health assessment services,
Toronto's Medcan Clinic offers two additional tests: enhanced cancer and genetic
screening, billed as "the only preventive genetics screening service in Canada,"
and enhanced cardiovascular screening, which identifies the risk for
cardiovascular disease. Both cost $295.
The question recently put to the Canada Revenue Agency (CRA) is whether any
of the fees not covered by your employer qualify as an eligible medical expense
for the purpose of the medical expense tax credit.
The Income Tax Act allows you to claim a credit for qualifying medical
expenses against your taxes owing. The 2006 federal credit amounts to 15.25% of
eligible medical expenses, increasing to 15.5% for 2007 and beyond. The
provinces also provide their own credits at varying rates.
To claim the credit in 2006, however, your total medical expenses (including
any expenses of your partner and dependent children under the age of 18) must be
more than either 3% of your net income or $1,885, whichever is less.
In the Interpretation Bulletin, Medical Expense and Disability Tax Credits
and Attendant Care Expense Deduction (available at cra-arc.gc.ca), the CRA
maintains a comprehensive list of which medical expenses qualify for a tax
Each year, the CRA responds to queries from taxpayers about medical expenses
not discussed in that bulletin.
Generally speaking, the costs of health-care services qualify if the medical
services relate to "the diagnosis, treatment or prevention of disease and the
services are performed by a medical practitioner or nurse."
The CRA concluded that if the assessment is provided by medical practitioners
or nurses, the entire cost of the assessment would qualify for the credit.
However, if any of the service providers (excluding clerical staff) are not
medical practitioners or nurses, that portion of the cost of the assessment
would not qualify for the credit.
For example, if the clinical assessment offers a nutritional evaluation, this
portion of the assessment fee would qualify for the credit if the nutritional
information was delivered by a registered dietician, a profession regulated by
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