The Refundable Medical Expense Supplement is a refundable tax credit designed to provide financial assistance to eligible low- and modest-income Canadians who have significant medical expenses.
Unlike the regular Medical Expense Tax Credit, which is non-refundable, the refundable medical expense supplement can provide a tax refund even when a taxpayer does not have enough income tax payable to benefit fully from a non-refundable credit.
What Is the Refundable Medical Expense Supplement?
The refundable medical expense supplement can be claimed on Line 45200 of the Canadian Income Tax and Benefit Return.
For eligible taxpayers, the maximum supplement is $1,504. The credit is based on qualifying medical expenses and the taxpayer's earned income and family income.
The supplement is particularly helpful for individuals and families with lower incomes who have substantial eligible medical expenses.
Who Can Claim the Credit?
To qualify, an individual generally must:
- Be 18 years of age or older by the end of the tax year.
- Be a resident of Canada throughout the year, subject to special rules for individuals who die during the year.
- Have at least $4,390 of net income from employment and/or business income for the year.
- Have eligible medical expenses that can be used to calculate the medical expense tax credit.
- Meet the applicable family income requirements.
Trusts cannot claim this refundable credit.
How Is the Supplement Calculated?
The refundable medical expense supplement is limited to the lesser of:
- $1,504; or
- 25% of the eligible medical expenses used for the calculation.
The credit is also reduced when net family income exceeds the applicable income threshold. For the tax year covered by these rules, the supplement is reduced by 5% of net family income exceeding $33,294.
The maximum income limit also applies. A taxpayer cannot claim the refundable medical expense supplement when their net income, or combined net income with their spouse or common-law partner, is $63,374 or more.
What Income Counts as Earned Income?
For this credit, employment income can include:
- Salary and wages
- Employment-related benefits
- Gratuities and other remuneration
- Other qualifying employment income
Certain deductions may be taken into account when determining net employment income. These can include:
- Registered pension plan contributions
- Annual union and professional dues
- Eligible employment expenses
- Other allowable employment-related deductions
Amounts received from wage-loss replacement plans are not included when calculating net income from employment for this purpose.
Can the Same Medical Expenses Be Claimed Twice?
Yes. Eligible medical expenses may be used when calculating both the Medical Expense Tax Credit on Line 33099 and the Refundable Medical Expense Supplement on Line 45200, provided all eligibility requirements are met.
The two credits have different rules, so taxpayers should calculate both where applicable.
Example: Calculating the Refundable Medical Expense Supplement
Ali has employment income of $22,500 for the tax year. He is single and has $6,200 in eligible medical expenses. He has no other income or deductions.
Step 1: Calculate Allowable Medical Expenses
Medical expenses: $6,200
Less 3% of employment income:
$22,500 × 3% = $675
Allowable medical expenses:
$6,200 − $675 = $5,525
Ali can therefore claim $5,525 as allowable medical expenses for the applicable medical expense tax credit calculation.
Step 2: Calculate the Refundable Medical Expense Supplement
Based on the applicable calculation, Ali can claim a refundable medical expense supplement of $1,381 on Line 45200.
Therefore, Ali may be able to claim:
- $5,525 in allowable medical expenses for the medical expense tax credit calculation; and
- $1,381 as the refundable medical expense supplement.
Important Considerations for Seniors
Many seniors may not qualify for the refundable medical expense supplement because the credit requires a minimum amount of employment and/or business income.
However, seniors may still qualify for the regular Medical Expense Tax Credit if they have eligible medical expenses.
Key Takeaways
The Refundable Medical Expense Supplement can provide valuable tax relief to eligible Canadians with lower incomes and significant medical expenses. Before claiming the credit, remember that:
- The maximum refundable medical expense supplement is $1,504.
- The credit can be claimed on Line 45200.
- Eligible taxpayers must generally be 18 years of age or older.
- A minimum amount of employment and/or business income is required.
- Eligible medical expenses may also be used for the Medical Expense Tax Credit on Line 33099.
- The supplement can be reduced based on net family income.
- Trusts cannot claim the refundable medical expense supplement.
Final Thoughts
The Refundable Medical Expense Supplement can provide valuable tax relief to eligible Canadians with lower incomes and significant medical expenses. Because the calculation depends on earned income, medical expenses, and family income, taxpayers should review their circumstances carefully before claiming the credit.
If you have eligible medical expenses, it may be worthwhile to determine whether you qualify for both the Medical Expense Tax Credit and the Refundable Medical Expense Supplement.
Tax rules, thresholds, and credit amounts can change from year to year. Always verify the applicable CRA requirements for the tax year being filed.
Posted on 11 August, 2026