The 2008 federal budget provided some clarifications to the medical expense tax credit (METC) provisions regarding the eligibility of drugs and medications, says a note from Green Shield Canada.
Prior to the new budget, drugs and medications qualified for the METC if they were prescribed by a medical practitioner and recorded by a pharmacist, with the aim of ensuring that tax relief was provided only for required substances not generally available to the public.
Recent court rulings have widened the scope of the METC, allowing claims for vitamins, supplements and other non-prescription drugs to qualify. According the new budget, as of February 26, 2008 drugs that may be purchased without a prescription are no longer classified as eligible medical expenses under the Income Tax Act.
In addition to over-the-counter drugs, vitamins, vaccines and nitro-glycerine are now considered a taxable benefit, with the exception of oxygen and vitamin B12 (for certain conditions).
According to the budget, “A drug will only be considered an eligible benefit and non-taxable if it is manufactured, sold or represented for use in the diagnosis, treatment or prevention of a disease, disorder or abnormal physical state, or its symptoms, or in restoring, correcting or modifying an organic function; it can lawfully be acquired for use by the patient only if prescribed by a medical practitioner; and the purchase is recorded by a pharmacist.”
What remains to be confirmed by the Department of Finance, says Green Shield, is whether or not private health services plans can continue to cover drugs that do not require a prescription when prescribed by a medical practictioner.
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