CRA Money: The Best Benefit to Claim in 2024

Written by Amy Legate-Wolfe at The Motley Fool Canada

The Canada Revenue Agency’s Medical Expense Tax Credit (METC) stands out as one of the most versatile and beneficial tax credits that Canadians can claim in 2024. Unlike many other credits, which are tied to specific financial or life circumstances, the METC is inclusive of a wide variety of medical costs that most Canadians encounter.

Whether you’ve had a routine visit to the dentist, purchased prescription glasses, or relied on medical devices or specialized treatments, chances are you have an eligible expense to claim. This credit is non-refundable. This means while it won’t lead to a cash payment if you owe no taxes, it can significantly reduce the amount you do owe, keeping more of your hard-earned money in your pocket.

The beauty of the METC lies in its scope. It covers everything from prescription medications to vision and dental care, and rehabilitation services. It even takes care of some less obvious costs like travel expenses incurred for medical appointments that are more than 40 kilometres away. For those with disabilities, additional aids, equipment, and related modifications can also qualify. This extensive list ensures that almost every Canadian can find at least one medical expense to claim on their tax return. What’s more, the CRA regularly updates its guidelines. So it’s worth checking the latest eligible expenses as there might be items you didn’t realize could help lower your tax bill.

Claiming the METC is particularly beneficial for families, as expenses for you, your spouse or common-law partner, and dependent children under 18 can all be included in a single claim. If you’re part of a larger family unit, even extended family members’ medical expenses may be eligible in some cases. The credit is calculated based on total eligible expenses minus a threshold amount that is the lesser of $2,635 or 3% of the taxpayer’s net income. A savvy tip is to have the family member with the lowest income claim the credit. This maximizes the benefit and reduces the overall deduction from the total amount.

Now, what’s the best thing to do with savings from claiming your medical expenses? While it might be tempting to spend it on a celebratory dinner or shopping spree, reinvesting that money can set you up for long-term financial success. One particularly strong option in 2024 is OpenText (TSX:OTEX) – a leading Canadian software company specializing in enterprise information management. OpenText has long been a favourite among investors for its consistent performance, dividend payouts, and growth-oriented strategy, thereby making it a fantastic choice for Canadians looking to build future income.

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