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Medical expense claim

Can anyone clarify for me if you want to claim medical expenses in a 12 month period lets say ending in 2017. Do you have to have a medical receipt that was paid in 2017 in order to claim expenses from 2016.
In other words, if you had a bunch of medical in 2016 and none in 2017, but did not need to claim them in 2016 because income too low, can you claim them in 2017 or not?

The rule is that you can claim medical expenses for any 12 month period that ends in the year. You can’t just carry forward unused expenses from 2016 and claim them in 2017. They must have been paid within the 12 month period that ends in 2017 that you indicate at the top of the Medical Expenses Worksheet.

Nothing that says you can’t set your dates to be Jan 2, 2016 to January 1, 2017.

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So I claimed medical with the dates Jan 2, 2016 to Jan 2, 2017. CRA are disallowing the medical receipts because there is not a receipt that was paid in 2017. They say at least one receipt must be paid in 2017 to claim the receipts from 2016. Anyone else encounter this and if so, how did you deal with it.

That I haven’t run across before. I’d ask them where it says in the tax code that it says you must have a 2017 medical receipt. I have never heard that before and it makes no sense.

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You have to do a T1 adjustment for 2016 and these expenses can carry forward until there is a year that you have taxable income and can use them then.

I agree with @laurie

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This is incorrect. You can claim them for the first time on the 2017 year.

And to the OP: I have clients who do exactly this (Jan2-Jan2) and have not had a problem in all the decades. I think you got a newby auditor. Ask them to review it with their senior.

I agree with most others. The Act, in 118.2(1), just requires that the medical expense was paid by the individual within any period of 12 months that ends in the taxation year (24 if the person died in the tax year). Your 2016 expenses should qualify (as long as they’re within the 12 month period), despite not having a receipt paid in 2017.

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Thank you for the responses.

I have talked to different people at CRA and keep getting the same response. Supposedly senior people after my initial inquiry. Have another request in to talk to a senior auditor.

Just wanted to make sure that I was on the right track.

If/when you get talking to the senior auditor, ask them to give you the specific reference in the Act where it requires a 2017-paid receipt. I’ve found that some CRA employees assume something is a requirement until they’re challenged to prove it. Of course, sometimes, they just say they’ll assess it their way and leave it to us to appeal (which we do).

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I’ll add my endorsement to the advice from Laurie, Kevin & jglass. You do not need any of the expense(s) to have been paid in the current tax year if you are claiming for a 12 month period beginning in the previous year and ending in the current tax year. You would surely prevail on a notice of objection if it were to go that far. It is a disgrace that so-called tax auditors are making up their own bogus rules.

“So I claimed medical with the dates Jan 2, 2016 to Jan 2, 2017”

Maybe that is the problem. 366 days.

Since 2016 was a Leap Year, technically Jan 02, 2016 to Jan 02, 2017 is 367 days. :smiley:
I don’t think that is the issue though, as subsection 118.2(1) refers to “12 month periods” rather than days.

As Dunner mentioned… ss118.2(1)

“Is the total of the individual’s medical expenses…that were paid by the individual or the individual’s legal representative within any period of 12 months that ends in the taxation year”

It’s a bit thin… but it seems the reviewer must be interpreting the end of the 12 month period to be the date indicated on the newest receipt.

Definitely not something that would be cut and dry without a judge’s interpretation.

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I knew I should have checked. :grinning:

What I was trying to get at was that it is not a valid claim period. I have seen strange messages generated on reviews before that really don’t have anything to do with the issue. I was thinking this could be one of those times.

Tell them to assess and you’ll file a Notice of Objection. The law in S.118.2(1) is pretty clear that the “period” has to end in the tax year - there is no mention of requiring evidence of a receipt. And further, that it is “any period of 12 months that ends in the taxation year” … again, not one defined by a receipt. As long as the expenses were claimed neither prior nor subsequently, they are good.

CRA, if they want to fight that, will lose. There really isn’t even any grey area around that, so it seems that someone is just being stubborn. Assess and Object.

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If you claimed Jan 2 to Jan 2, you would have a problem. Resubmit with Jan 2 to Jan 1. The person explaining it at the CRA was not explaining it correctly.

I’ve seen them reject medical because I forgot to change the period on the top of the form, yet only submitted medical for a permitted period. If you say two different things in the submitted documents, they are not permitted to guess what you meant. Hence, a reject.

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Tim is correct - you have claimed 1 year and 1 day if you use Jan 2 - Jan 2. Using Jan 2 - Jan 1 gets you onside by only claiming in one 12 month period.

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Just for clarification, I typed the days in wrong. The actual period was Jan 2, 2016 - Jan 1, 2017. So the period is not the issue.

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So, a literal reading of S118.2(1) gives rise to a “count back from” interpretation, not a “count forward from” one. Count back from the date which must end in the tax year until you reach 12 months. This variously contrasted with MANY sections in the Act which specify “within x days after/from” etc.

The more interesting thing to me is the interpretation of “12 months”:

From S 28 of the Interpretation Act:
Calculation of a period of months after or before a specified day

28 Where there is a reference to a period of time consisting of a number of months after or before a specified day, the period is calculated by

(a) counting forward or backward from the specified day the number of months, without including the month in which that day falls;

(b) excluding the specified day; and

© including in the last month counted under paragraph (a) the day that has the same calendar number as the specified day or, if that month has no day with that number, the last day of that month.