If you've paid significant out-of-pocket medical costs in 2025, Canada's Medical Expense Tax Credit (METC) could meaningfully reduce what you owe the CRA. Unlike a deduction that lowers your taxable income, this is a non-refundable tax credit — it directly reduces your federal tax owing. Understanding which expenses qualify, how the threshold works, and how to claim correctly on your T1 return can put real money back in your pocket.
The METC is calculated on eligible medical expenses that exceed a minimum threshold. For the 2025 tax year, you can only claim the portion of your eligible expenses that exceeds 3% of your net income or $2,759 — whichever is less. The federal credit rate is 15%, so you receive 15 cents back for every dollar of eligible expenses above that threshold.
This threshold exists because the METC is designed to assist Canadians facing extraordinary medical costs, not routine health spending. Provinces and territories also offer their own parallel medical expense credits at varying rates, so your total benefit is typically higher than the federal 15% alone.
One important planning detail: eligible expenses do not have to follow the calendar year. You can claim any 12-consecutive-month period ending in the tax year you're filing. For a 2025 tax return, you could claim expenses from, say, April 2024 through March 2025 — whichever 12-month window maximises your claim. This is especially useful if you had a large medical procedure late in one year and continuing treatment costs in the next.
On Line 33099 of your T1 return, you claim eligible medical expenses for yourself, your spouse or common-law partner, and your dependent children born in 2008 or later. On Line 33199, you can claim for other dependants — including adult children, parents, grandparents, siblings, and other qualifying relatives — provided their net income is below the maximum threshold and you were supporting them financially.
Claiming for multiple family members under one return can significantly raise the total eligible amount above the threshold, increasing the credit value.
The CRA maintains a detailed list of eligible expenses. The following are among the most commonly claimed:
Only the unreimbursed portion of any expense is eligible. If your employer's group benefits plan covered $800 of a $1,200 dental bill, only $400 can be claimed.
| Item | Amount (CAD) |
|---|---|
| Net income (Line 23600) | $68,000 |
| 3% of net income | $2,040 |
| Fixed 2025 threshold | $2,759 |
| Applicable threshold (lesser of the two) | $2,040 |
| Total eligible medical expenses | $7,500 |
| Expenses above threshold ($7,500 − $2,040) | $5,460 |
| Federal METC (15% × $5,460) | $819 |
In this example, the taxpayer's net income of $68,000 means 3% ($2,040) is less than the fixed $2,759 ceiling, so the lower amount applies. With $7,500 in eligible costs, the federal credit is $819 — and the provincial credit adds further savings on top of that.
If the same taxpayer earned $110,000 instead, 3% of net income would be $3,300, which exceeds $2,759 — so the fixed $2,759 threshold would apply, yielding a higher claimable amount for the same medical expenses. Higher earners benefit from the ceiling; lower and middle earners generally use the 3% calculation.
Medical expenses are claimed on Schedule 1 of your T1 General return:
You will need to total your receipts, subtract the applicable threshold, and enter the net amount. Tax software handles the calculation automatically, but you should always verify that only eligible, unreimbursed expenses are included. The CRA also has a searchable list of eligible medical expenses on its website if you're unsure whether a specific cost qualifies.
At Swift Accounting Ltd. Calgary, we often see clients leave this credit on the table simply because they don't realise how broadly the eligible expense list extends — fertility treatments, psychological services, and travel to distant medical facilities are among the most overlooked.
Yes, provided you were financially supporting them and they qualify as dependants for tax purposes. Claim their expenses on Line 33199. Keep documentation showing financial support in case the CRA asks for it.
Premiums you pay personally — including your share of a group plan — are generally eligible. Premiums paid entirely by your employer on your behalf are not, because you did not personally bear the cost. Check your T4 or benefit statements to confirm what you personally contributed.
You can only claim the portion not covered by provincial health insurance or any private plan. For example, if Alberta Health covers a procedure entirely, you cannot claim it. If it partially reimburses a cost, only your out-of-pocket remainder is eligible.
If the nearest available medical facility was more than 40 km away, you can claim the cost of transportation using CRA's approved per-kilometre rate. If the distance exceeded 80 km, you may also claim meals and accommodation at CRA's prescribed rates. Keep a log of travel dates, distances, and the reason medical care was unavailable locally.
Medical expenses can add up quickly, and the METC is one of the more generous provisions in Canada's personal tax system — particularly for families managing chronic conditions, dental work, or fertility treatments. Getting the claim right means understanding not just what qualifies, but how to structure the 12-month window and family allocation for the best outcome. If you want a second set of eyes on your return or have questions about more complex scenarios — attendant care, disability interactions, or out-of-province treatment costs — the team at Swift Accounting Ltd. is here to help. Contact us today to book a consultation and make sure you're claiming every dollar you're entitled to.
