The best way to minimize how much you pay in taxes every year is to make sure you’re claiming everything you legally can. You might not realise but, like any other medical prescription, the Canada Revenue Agency (CRA) allows medical cannabis to be claimed as a medical expense deduction on your federal income taxes.
But you can only maximize your medical cannabis tax-deductions if you have a thorough understanding of Canada’s confusing tax laws. To be blunt, we’ve done all the heavy lifting for you.
Who Can Claim Medical Expense Cannabis Tax Credits?
In order to claim any medical cannabis expenses on your tax return you need to have a medical marijuana document. Claimed expenses must also have been purchased for medical purposes from a licensed provider.
According to the CRA website, you can claim the amount paid for cannabis, cannabis oil, cannabis plant seeds, or related products purchased for medical purposes. This can include edible cannabis, topicals, rolling papers, holders, pipes, water pipes, bongs, and vaporizers, if they are used to consume medical cannabis.
If you have a grow-your-own license from Health Canada, you can claim the cost of the cannabis plant seeds and cannabis. You cannot deduct the money you used to grow and produce medical cannabis, such as pots, soil, nutrients, or lights. Like other tax deductions, you need to keep your receipts. The vast majority of Canadians file their taxes online and don’t submit their receipts, but if the CRA asks for proof, you need to provide it. If you can’t, you won’t be able to make those deductions.
Claiming Medical Cannabis Tax
You can only claim eligible medical marijuana expenses on your tax return if you, or your spouse or common-law partner:
- Paid for the medical expenses in any 12-month period ended in the calendar year.
- Did not claim them in 2019
You can claim the eligible medical cannabis expenses on line 33099 or line 33199 of your tax return.
Use line 33099 to claim eligible medical marijuana expenses that you or your spouse or common-law partner paid for any of the following persons:
- yourself
- your spouse or common-law partner
- your or your spouse’s or common-law partner’s children who were under 18 years of age at the end of the tax year
Use line 33199 to claim eligible marijuana medical expenses that you or your spouse or common-law partner paid for any of the following persons who depended on you for support:
- your or your spouse’s or common-law partner’s children who were 18 years of age or older at the end of the tax year, or grandchildren
- your or your spouse’s or common-law partner’s parents, grandparents, brothers, sisters, aunts, uncles, nieces, or nephews who were residents of Canada at any time in the year
Calculating the Eligible Medical Expense Amount
Like your other medical expenses, you can claim for any period of 12 months, not previous claimed, provided the final month falls within the tax year. For 2020, you could claim your total eligible medical expenses, less $2,397 (or 3% or your net income, whichever is less). The exact figure changes annually based on inflation and other factors.
If you’re filling out line 33099, you can claim your total eligible medical marijuana expenses, less $2,397 or three percent of your net income (line 23600 of your tax return). Again, whichever is the lesser of the amounts.
If you’re using line 33199, you can claim the amount of the eligible expenses minus the lesser of $2,398 or three percent of your dependant’s net income (line 23600 of their tax return).
The majority of taxpayers in Canada only submit one return through the CRA. Quebec is an exception, however, as residents file both a provincial income tax return with Revenu Québec and a federal return with the CRA.
What Is the Refundable Medical Expense Supplement (RMES) Option for Medical Cannabis Tax Claims?
The Refundable Medical Expense Supplement (REMS) is a tax credit on line 45200 of the T1 return aimed to help those medical marijuana recipients who have high medical expenses and are lower income earners.
If the credit exceeds the taxes payable, you will be refunded the balance.
To be eligible for the RMES tax credit in any given year, you must meet the following five criteria:
- Age. Be at least 18 years of age at the end of the tax year
- Residence. Lived in Canada throughout the year
- Medical Expenses. Reports eligible medical expenses under the METC (medical expense tax credit) for themselves, their spouse or common-law partner, or a dependent.
- Personal Working Income. The individual’s personal net income is greater than or equal to the sum of minimum earnings threshold. In 2020 it was $3,714.
Family Income. The person’s net family income is below a certain threshold. In 2020, the maximum amount of the RMES was reduced at a rate of five percent, starting at net family income of $28,614 and eliminated entirely when net family income reached $53,604.
Is GST/HST Inclusive in Medical Cannabis Tax Claims?
In Canada, it’s tough to get out of the reach of the CRA. As with recreational cannabis, medical marijuana is subject to consumer sales tax, which, depending on which province you live in, will mean paying GST, HST, GST/PST, or QST (in Quebec).
MMC, Making Access to Medical Cannabis Simple
Medical Marijuana Consulting (MMC) makes it easy to access medical cannabis. As a trusted name in medical cannabis consulting, MMC has been providing patients from across Canada with access to medical professionals.
Our dedicated team of physicians, psychiatrists, and nurse practitioners can provide a prescription, offer you help to get you coverage for your prescription costs (if eligible), and refer you to a licensed producer.
At MMC, we want to make access to medical cannabis as simple as possible for as many people as possible. Join our Ambassador Program and receive $15 for every person you refer to MMC that becomes a patient.
To learn more about Medical Marijuana Consulting and how you can secure a prescription as part of your personalized medical cannabis treatment plan, book a consultation online, contact us at 844-312-5143, or email us at patientcare@medmc.ca.
