Everything You Need to Know to Claim Medical Marijuana on Your Tax Return
For the almost 350,000 Canadians who are registered medical marijuana patients, buying the medication they need can be quite expensive. Fortunately though, medical marijuana is legal at the federal level in Canada (unlike in the US). That means registered patients can claim marijuana as a medical expense when filing their taxes each spring.
Of course, trying to figure out how to file even the basic stuff like your income is difficult enough, so Civilized reached out to the Canada Revenue Agency (CRA) to find out everything you need to know about claiming medical marijuana on your annual tax return.
Where do I claim my medical marijuana?
First off, let’s talk about which part of your tax return you have to fill out to claim your medical marijuana. The CRA considers the purchase of medical marijuana the same thing as buying any other prescription drug. That means your medical marijuana qualifies as a valid medical expense. All medical expenses are claimed either on Line 330 or Line 331 of your tax return.
Line 330 is used to claim any medical expenses you or your spouse or common law partner may have incurred over the past year as well as any unclaimed expenses in the previous year. Line 331, on the other hand, is used to claim medical expense for any dependents you may have. That includes your or your partner’s children up to the age of 18 as well as any other immediate family members that you may be responsible for — perhaps your elderly parents or a disabled sibling.
Ok, so what exactly can I claim?
You can claim pretty much any form of cannabis that you might be using as medication so long as it was purchased through the proper channels. That means all your medical marijuana has to come from either a licensed retailer or via mail order directly from a licensed producer.
“Under the Income Tax Act, amounts paid for marihuana [sic], marihuana plants or seeds, cannabis or cannabis oil for a patient may be eligible for the Medical Expense Tax Credit (METC) where the supply is purchased in accordance with the regulations for accessing these products for medical purposes,” the CRA told Civilized in a statement.
However, if you’ve just bought a new vaporizer to help you consume your medical marijuana a little more discreetly, you won’t be a to claim that on your tax return — even if your physician told you to get it. While technically speaking, you can can claim the cost of devices that have been prescribed to you by a doctor, things like vaporizers aren’t explicitly listed by the CRA as a qualifying device. So you won’t be able to claim the cost of one just yet, though that may change in the future. That also means you wouldn’t be able to claim things like lighters, papers or pipes either. Nor can you claim the cost of supplies you use to make your own edibles.
Great, so how much can I claim?
Medical expenses are one of the things that don’t have a limit on how much you can claim. But that doesn’t mean you can claim the entirety of what you’ve spent on medical marijuana over the past year.
The total amount you can claim on either Line 330 or Line 331 will take a bit of math on your part to figure out. On Line 330, you can claim the full cost of your medical marijuana (as well as any other medical expenses) minus either $2,302 or three percent of your income, whichever is less. Things are similar for claims made on Line 331, where you can claim all medical expenses (which includes the cost of medical marijuana) minus either $2,302 or three percent of your dependent’s income. It’s also worth noting that you can even claim expenses that weren’t paid in Canada, as long as medical cannabis is legal in the jurisdiction where the patient bought it, and the jurisdiction’s medical marijuana program covers visitors. You can claim all costs incurred over the past year as well as any unclaimed costs in the year before as well.
In most cases medical expenses are considered non-refundable claims. This means that while claiming medical marijuana on your tax return will reduce the amount of taxes you have to pay out, it won’t make your tax refund any bigger if you’re already getting one. So the measure is about offsetting the taxes that you owe more so than recouping expenses.