Which medical expenses can be claimed, and the 3% rule

Many households keep a drawer of pharmacy receipts and dental bills all year and then never claim them, assuming the total is too small to matter. Sometimes that is right. But whether anything counts depends less on the size of the pile than on two choices most people never think about: which spouse claims, and which 12 months the claim covers.

The medical expense tax credit is a non-refundable federal credit, with matching provincial or territorial credits. Here is how its threshold works for 2026 and how to see whether a claim is worth making.

The shoebox of receipts

The credit does not cover all medical expenses. It covers the part of a household’s eligible expenses that exceeds a threshold. Below that threshold, nothing counts. This is meant to target costs that are high relative to income, and it is why the same bills can be worth a claim for one person and nothing for another.

The 3% rule, and its ceiling

The CRA describes the calculation as total eligible expenses minus the lesser of two amounts: 3% of your net income (line 23600), or a fixed dollar amount set each year. For 2025 the fixed amount is $2,834. For 2026 the CRA’s indexation table gives $2,890.

So the threshold is 3% of net income until net income reaches about $96,333; above that, it stops growing at $2,890. A person with net income of $40,000 has a threshold of $1,200. A person with net income of $150,000 has a threshold of $2,890, not $4,500.

Whose expenses go on one claim

On line 33099, you can claim eligible expenses paid for yourself, your spouse or common-law partner, and your children who were under 18 at the end of the year. These are pooled into one claim, with one threshold based on the claimant’s net income.

Expenses for other dependants who relied on you for support, such as an adult child, a grandchild, or a parent, sibling, aunt, uncle, niece or nephew who was resident in Canada, go on line 33199. Each dependant is calculated separately, using that dependant’s own net income for the 3% test.

Which spouse should claim, worked through

Because the threshold depends on the claimant’s income, the CRA suggests comparing what each spouse could claim. The lower-income spouse often comes out ahead. The table uses one household’s $3,200 of eligible expenses for 2026: dental work, prescription glasses and prescription drugs.

The same receipts are worth more than four times as much in federal credit when claimed by the lower-income spouse. One caution: a non-refundable credit only helps if the claimant has federal tax to reduce. If Spouse A’s other credits already bring their tax to zero, the claim is worth more on Spouse B’s return.

Choosing the 12 months

The claim is not tied to the calendar year. For the 2026 return, you can claim eligible expenses paid in any 12-month period ending in 2026, as long as they were not claimed for 2025. Someone who had major dental work in October 2025 and a hearing aid in May 2026 could pick a period from October 2025 to September 2026 and bring both into one claim, clearing the threshold once rather than twice.

What counts, and what does not

The CRA’s list is long and specific. Among the expenses it lists as eligible:

• dental services, dentures, implants and orthodontic work;
• prescription drugs and medications;
• eyeglasses, contact lenses and other vision devices, with a prescription;
• premiums paid to private health services plans, including the employee share of a workplace plan;
• services of doctors, specialists and hospitals, and devices such as wheelchairs.

And among those it lists as not eligible: gym or fitness club fees, over-the-counter medications, vitamins and supplements, organic food, provincial or territorial health care plan premiums, and travel of less than 40 km. Some items need a prescription or a certificate from a medical practitioner; the CRA’s list says which.

Travel for care

Travel can count when someone travels at least 40 km to get medical services that are not available nearer home, and further costs can count at 80 km or more. The conditions are detailed and the CRA lists them; keep a note of dates, distances and the reason the care was not available locally.

What the credit is worth

The federal credit is the amount above the threshold multiplied by the lowest federal rate, 14% for 2026. The Department of Finance’s report on the rate reduction notes that about 5.8 million people claim medical expenses. A temporary top-up credit, in place for 2025 to 2030, keeps a 15% rate for total non-refundable credit amounts above the first bracket threshold of $58,523, which matters mainly for very large claims. Our file on the new 14% rate explains why credits fell slightly in value while tax on income fell more.

What to check before filing

Other credits work on similar logic. The donation credit rewards pooling receipts across a couple in a different way, and home office costs are a deduction rather than a credit.

SOURCES ON FILE

1. Canada Revenue Agency — Lines 33099 and 33199, eligible medical expenses — the threshold rule, the 12-month period, whose expenses and examples.
2. Canada Revenue Agency — Indexation adjustment for personal income tax and benefit amounts — the $2,890 ceiling for 2026.
3. Department of Finance Canada — Report on the impact of reducing the lowest marginal rate on non-refundable tax credits — credits at 14% and the top-up tax credit.

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