Travel insurance is a necessary safeguard when you are out of province or out of the country, but it can be expensive. Costs for insurance increases based on the number of days you are away, your age and your health conditions. That’s why its important to retain your travel insurance premium receipt to see if you qualify for a tax credit based on the money you have spent on your coverage.
What is the Eligible Medical Expense Tax Credit for travel insurance?
The medical expense tax credit is a tax credit that you can claim when filing your income tax and benefit return every year. The Canadian government provides various tax credits that can be used to reduce the tax you pay on your taxable income, like the Basic Personal Amount every Canadian is entitled to claim, or donations credits or the caregiver credit.
When it comes to your travel insurance costs, you may be eligible to claim some of the cost of your premium by claiming it for a CRA Medical Expense Tax Credit on your income tax return.
Only the portion of the premium you pay for travel medical insurance is eligible to be claimed. Other travel insurance premium costs like trip cancellation/interruption insurance and baggage insurance are not eligible for Medical Expense Tax Credits. Keep this in mind when you are using your receipt for any all-inclusive travel coverage you purchased. You’ll need to prove what portion of the cost was eligible.
In order to qualify to make a claim, your medical expenses must exceed a minimum eligible dollar value threshold set by the government each year and, while you won’t get back the full amount of your travel health insurance costs, if you qualify you will recoup a percentage of them. Talk to an accountant or tax professional to understand everything about making your claim.
What other insurance costs can I claim as a medical expense?
If you do have medical expenses while you are out of province or country, you may be able to claim them as long as you were not reimbursed for those expenses under an insurance plan or through government coverage.
Here are some examples of other eligible medical expenses:
- Expenses for care in a facility such as a nursing home for yourself, your spouse, common-law partner, or dependent
- Some care and treatment expenses such as cancer treatments, eye surgery, therapy, organ transplant
- Construction or renovation costs to adapt your home for medical reasons and mobility impairment issues, like installing ramps and increasing passageways or costs to modify your vehicle
- Costs for medical equipment and devices such as phototherapy equipment, bathroom grab bars and seats, large print on-screen devices, baby breathing monitors, and more. To claim, you will need a prescription to be eligible for the tax credit.
Most individual health insurance premiums paid may also qualify as a credit
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 out-of-pocket amounts that exceed your insurance coverage maximums you can use the CRA’s list of eligible expenses, for 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
- 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.
Insurance can take credit for saving you money
While the full amount of your travel medical insurance premiums or health insurance premiums may not be eligible to claim on your tax return, they will always be delivering protection that can save you from significant out-of-pocket costs. Whether you file with pen and paper or submit online, using your allowable travel and health insurance premium deductions is just one more reason having your insurance in place is smart for your bottom-line. Don’t have your travel or health insurance in place yet? Call us today or go online. We’re ready to help.
