2011 Federal Budget—Medical Expense Tax Credit for Other Dependants

The federal Budget tabled on June 6, 2011 included no changes to the income tax measures originally announced in the Budget on March 22, 2011.

Effective for 2011 and subsequent years, the Budget proposes elimination of the $10,000 limit on eligible expenses that can be claimed for a “dependant” relative in respect of the Medical Expense Tax Credit. Currently, a taxpayer may only claim eligible expenses of a “dependant” relative that exceed the lesser of 3 per cent of the dependant’s net income and an indexed dollar threshold ($2,052 in 2011), to a maximum of $10,000. In general, there is no limit on the amount of eligible expenses a taxpayer can claim for himself or herself, a spouse or common-law partner or a child under 18 years of age. The elimination of the $10,000 limit on eligible expenses will harmonize the tax treatment between both groups.

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