Cannabis qualifies as a medical expense provided certain conditions are being met
As Canadians eagerly assemble their financial records and giddily gather around the kitchen table for the annual treat that is tax-filing season, the Canada Revenue Agency (CRA) is highlighting a few changes to the tax code. This year, cannabis made the cut of changes that stand out.
If medical marijuana is one of your biggest budget items, you may be able to deduct the expense from your income taxes this year, but certain requirements must be met.
According to the CRA’s website, to be eligible for the Medical Expense Tax Credit, “the amounts paid for cannabis, cannabis oil, cannabis plant seeds or cannabis products purchased for medical purposes from a holder of a licence for sale” can be claimed, but only if the following apply: the patient has a valid medical document for the products purchased; the patient is a registered client of a company licenced to sell those products; and the patient makes the purchase from that licenced company.
This credit applies to you, your spouse and any children under the age of 18. A licence-holder is described by the CRA as someone who has “a licence for sale for medical purposes,” a somewhat vague definition that could probably use some fine-tuning to avoid any audit-causing confusion down the road.
Sadly, costs related to producing your own medical cannabis for personal use are generally not eligible.
The CRA is also helping make filing taxes easier in general this year. It has created a Processing Times tool that will make one of the more frustrating parts of the process easier by letting users know how long it will take them to fulfill a specific request.
Using standard processing times and drop-down menus, the user-friendly tool will take a lot of guesswork out of the process. Gone are the days of sending requests off into the abyss, unsure of how long it will be before you get a response.
As Canada’s medical marijuana industry continues to evolve, and more Canadians and businesses begin to participate, expect the CRA to continue to adjust the tax code accordingly — hopefully to allow patients to keep more of what they spend on needed medication.
Written by David Yasvinski