Claiming Medical Cannabis On Your Taxes
Medical cannabis is a necessary, but financially burdensome, expense for many patients. And although insurance companies are slow to cover medical cannabis, you can offset at least some of the cost during tax season. The Canadian Revenue Agency (CRA) allows deductions for a variety of medical expenses, including prescription pharmaceuticals and hospital fees. This means patients may claim medical cannabis purchases as a medical expense when filing taxes. Anyone with a valid prescription (medical document) from a health practitioner purchasing medical cannabis from a Health Canada-approved licensed producer can deduct medical cannabis purchases when filing taxes.
Patients can claim the total amount paid for cannabis-specific products purchased through a licensed producer, including dried flower, cannabis oils, plants and seeds. However, some things cannot be claimed, including accessories such as vaporizers or infusing machines, storage bags or containers, as well as any costs related to home growing, such as lights or fertilizers. You may also claim any eligible medical expenses on your tax return within any 12-month period ending in 2018, as long as you did not claim them in 2017. This means if you didn’t claim your medical cannabis for part of 2017, as long as it’s within a 12-month period of time, you may claim it now. If you claimed your medical cannabis last year—in 2017—as well, you may only claim your purchases for 2018. Canadians can deduct the total amount of eligible medical expenses minus either $2,268 or three per cent of the total net income after taxes—whichever is the lesser amount.
To start the process, go to the website of your licensed producer(s), log in and find your order history. Tally up the totals from all of your orders for the taxable time that you are filing for, making sure you deduct the total from any accessories you purchased. If you cannot find your order history, contact your licensed producer for assistance. Next, you will want to download or print your receipts for the year (if you have not done so already). Either store your 2018 receipts digitally on your computer or print them out to store in your files. Although you don’t need to include them with your tax paperwork, the CRA recommends keeping your tax receipts for six years, including medical cannabis expenses, as they may request them at any time.
Now that you have your total expenses for medical cannabis you can add them to any other allowable medical expenses that you’re claiming on your T1 Income Tax and Benefit Return. If you hire a professional to complete your taxes, simply hand over your receipts the accountant will add them to your filing. When using online tax software, you will see prompts that allow you to enter medical expenses within the deductions and credits area. If you have any questions along the way in terms of your medical cannabis and taxes, please reach out to us and we will discuss in more detail. You may contact us at firstname.lastname@example.org or calling our toll-free patient hotline at 1-844-456-1515.