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Can I Deduct My Health Insurance Premium At Tax Time?

Make sure you use all of your eligible medical expense deductions when you file your income taxes. Your health insurance premium may be one of them.

When you are filing your income taxes, determining what can and what cannot be claimed as a medical expenses isn’t easy – and we want to make sure you don’t overlook an important deduction that may reduce the taxes you pay.

We know you are already savvy about managing unexpected and expected health expenses that can drain your budget –– that’s why you have health insurance.  But did you know that you may be eligible to claim the premiums you pay for your health insurance?

Most Individual Health Insurance Premiums Paid Qualify As a Deduction

According to the Canada Revenue Agency (CRA), as a rule the premium you pay for a private health services plan that covers yourself, your spouse or common-law partner, or your minor children — including the premium and applicable taxes — is an eligible medical expense you can claim at tax filing time.

To qualify as a private health services plan, the coverage must relate to medical, dental and hospitalization expenses eligible for the Medical Expense Tax Credit and can offer limited coverage for some non-eligible benefits.

For details on eligible expenses (including out of pocket amounts that exceed your insurance coverage maximums), you can use the CRA’s list of eligible expenses, that includes items such as:

  • Dental visits (but not for cosmetic dental reasons)
  • Elastic support hose or orthopaedic shoes (prescription needed)
  • Hearing or speaking aids
  • Injection pens and insulin
  • Vehicle modification devices
  • Large-print-on-screen devices
  • Mobility aids like a lift, scooter or crutches

Remember, you cannot claim any premiums you pay for your provincial health insurance plan or any premiums your employer pays for your health insurance.

Reporting Payments on Your Tax Returns

Include your health insurance premium amount with your other eligible medical expenses and claim the credit on lines 33099 and 33199 of your return (previously called lines 330 and 331).

You will need to keep your premium receipts to be able to prove the amounts you paid in the event of a CRA audit.

Your premium receipt for the prior year will be available on your insurers plan member online services website by the end of February of the following year.

Special Consideration If You Are Self-Employed

More and more people are becoming self-employed and earning income when you are self-employed is challenging.  That’s why at tax time it’s important to make use of all available business expenses to reduce your tax exposure.

The CRA considers private health services plan (PHSP) premiums payable to an insurance company to be deductible – and that can include your premiums for your personal health insurance policy that covers you, your spouse or common-law partner or your eligible dependents.

You can deduct premiums paid if you meet the following conditions:

  • your self-employment net income is more than half of your total income
  • other income you earn in the tax year is $10,000 or less
  • your activity in your business is regular and continuous, whether it is just you or you have a partner.

For more details go here.

This tax break can be a great financial help for you and your business.

Tax deductions make health insurance even more affordable

Whether you file with pen and paper or submit online, using your allowable health insurance premium deductions is just one more reason having your health insurance in place is smart for your bottom-line. Don’t have your health insurance in place yet?  Call us today or go online.  We’re ready to help.

2 Responses

  1. my husband & I are new clients with GMS Alliance Insurance Co. We are in our mid 80s. Can we claim the insurance premiums we pay out – e.g. we pay $158/month.
    on our annual taxes. Does GMS give us a tax receipt automatically or do we request it & present to the Tax Company we deal with?

    1. I will have someone reach out to you via your email address. Thank you for your comment. If you have any more questions please give us a call at 1-800-667-0429. On a side note I noticed that you are not clients of ours, you may want to contact GMS directly about this as well.

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