Claiming Medical Cannabis on Your Taxes
March 15, 2018
Medical Marijuana Forms – Claiming Cannabis on Your Taxes
The Canadian Revenue Agency (CRA) allows for deductions for a variety of medical expenses, including prescription pharmaceuticals and hospital fees. But luckily for Emblem patients, that’s not where the deductions end. If you have a valid prescription for cannabis you can claim medical cannabis purchases as a medical expense on your taxes. This is great news for many, as medical cannabis can be a financial burden and yet still isn’t covered by most third-party health insurance plans. (Thank you, Sun Life, for becoming the first major insurance company to offer coverage for medical cannabis. We hope many others follow suit.)
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. This means, as an Emblem patient you’re eligible and shouldn’t miss this opportunity when completing your 2017 taxes.
Patients can claim the total amount that you paid for cannabis-specific products purchased through your licensed producer, including dried flower, cannabis oils, plants and seeds. However, some things cannot be claimed, including accessories such as vaporizers or infusing machines (like the Levo), storage bags or containers, and any costs related to home growing, such as lights or fertilizers. You can claim any eligible medical expenses on your tax return within any 12-month period ending in 2017, as long as you did not claim them in 2016. This means if you didn’t claim your medical cannabis for part of 2016, as long as it’s within a 12-month period of time, go ahead and claim it now. Canadians can deduct the total amount of eligible medical expenses minus either $2,268 or three per cent of your total net income after taxes—whichever is the lesser amount.
To start the process, log into your Emblem account and click on “Order History” to see all of your past orders. Tally up the totals from all of your orders in 2017, making sure you deduct the total from any accessories you purchased. Next, to get your receipts for your files, click on “Order Confirmation” and download the receipts. Either store your 2017 receipts digitally on your computer or print them out and 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 pro to complete your taxes, simply hand over your receipts and you’re good. When using online tax software, you’ll see prompts that allow you to enter your medical expenses within the deductions and credits area.