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Eldercare/CA PrimePlus Services - 2005
Part 2/2 - Medical Expenses Tax Credit

By Anne Chun, C.A., CFP

In part 4 of our 2004 series of articles, we discussed Medical Expenses Tax Credit. The 2004 federal budget proposed some changes, which we will discuss here.

First, medical expenses paid on behalf of minor children will be added to the medical expenses of the taxpayer and his or her spouse and will not be affected by the income of the minor child.

Second, for medical expenses paid on behalf of any other dependent relative, the amount is limited to the lesser of 3 percent of the dependant's net income and $1813, and the maximum claim is limited to $5,000.

As a result of the proposed new Disability Supports Deduction (discussed in part 1 of our 2005 series of articles), the refundable medical expense supplement (available to taxpayers with a family net income not exceeding $32,541) will change. This will be equal to 25 percent of the allowable expenses claimed under the Medical Expense Tax Credit plus the Disability Supports Deduction, up to a maximum limit of $562 for 2004. The refundable medical expense supplement is on line 452.

* CA PrimePlus Services is a registered trademark of the Canadian Institute of Chartered Accountants. Eldercare/CA PrimePlus Services is a customizable range of financial management services for elderly and disabled persons.

Anne Chun, C.A. CFP is the principal of Anne Chun Professional Corporation, providing financial, tax, estate and Eldercare services. She is also the co-author of "Planning your Financial Future".