What is the medical expense tax credit threshold for 2026, and how does the 3% rule work?
For 2026, the federal medical expense tax credit threshold is the lesser of $2,890 or 3% of net income, so 3% applies until net income passes about $96,333. Your client claims eligible expenses above that threshold, paid in any 12 month period ending in 2026, and the credit is 14% of the excess.
What are the 2026 medical expense figures next to 2025?
The 2026 threshold is the lesser of $2,890 or 3% of net income, up from $2,834 in 2025 after 2.0% indexation canada.ca. The credit is worth 14% of the expenses above the threshold, because 14% is the lowest federal rate for 2026
canada.ca. For 2025 the CRA treats the rate as a blended 14.5%, since it fell from 15% to 14% on July 1, 2025
canada.ca.
| Figure | 2026 | 2025 |
|---|---|---|
| Dollar ceiling on the threshold | $2,890 | $2,834 |
| Net income where 3% equals the ceiling | $96,333 | $94,467 |
| Lowest federal rate (credit rate) | 14% | 14.5% |
| Refundable supplement, maximum | $1,534 | $1,504 |
| Supplement, minimum earnings | $4,478 | $4,390 |
| Supplement, family net income threshold | $33,960 | $33,294 |
| Indexation factor | 2.0% | 2.7% |
Below about $96,333 of net income, 3% is the smaller number and sets the threshold. At or above it, the threshold is a flat $2,890. In the Act the ceiling still reads $1,813, the unindexed base in subsection 118.2(1); the CRA publishes the indexed figure each year laws-lois.justice.gc.ca.
The CRA's own line 33099 page still shows $2,834, the figure for expenses paid in 2025, as of October 2026 canada.ca. Use $2,890 for 2026 returns.
Which spouse should claim the family's medical expenses?
Usually the spouse with the lower net income, because the threshold is 3% of the claimant's own income. Either spouse can claim the other's expenses, whatever that person earned, and the CRA accepts receipts in either name canada.ca. Line 33099 covers your client, their spouse or common law partner, and either one's children under 18 at the end of the year
canada.ca.
Take a couple with $5,000 of 2026 medical expenses for themselves and their 10 year old. One spouse has $120,000 of net income, the other $40,000.
| Step | Higher income spouse claims | Lower income spouse claims |
|---|---|---|
| Net income | $120,000 | $40,000 |
| 3% of net income | $3,600 | $1,200 |
| Threshold (lesser of 3% and $2,890) | $2,890 | $1,200 |
| Allowable expenses ($5,000 minus threshold) | $2,110 | $3,800 |
| Federal credit at 14% | $295.40 | $532.00 |
The lower income spouse saves $236.60 more federal tax. Check that spouse has enough tax payable to absorb the credit first, since a credit that cannot create a refund is wasted on someone who owes nothing.
How does the threshold work for adult dependants on line 33199?
Each adult dependant gets a separate calculation: the expenses paid for that person minus the lesser of $2,890 and 3% of the dependant's own net income canada.ca. Line 33199 covers children 18 or older, grandchildren, and parents, grandparents, siblings, aunts, uncles, nephews and nieces who depended on your client for support and lived in Canada at some point in the year.
Say your client pays $1,500 of dental and prescription costs for a 20 year old student with $8,000 of net income. The threshold is 3% of $8,000, or $240, so $1,260 goes on line 33199 and the federal credit is $176.40.
There's no dollar cap on the dependant portion in the current wording of subsection 118.2(1) laws-lois.justice.gc.ca. A low income parent or adult child usually has a tiny threshold, so this line often beats having that person claim on their own return, where they may have no tax to reduce.
Which 12 month period can your client pick?
Any 12 month period ending in 2026, as long as the expenses weren't claimed on a 2025 return canada.ca. What counts is the date paid, not the date the service happened
canada.ca. A client whose surgery and rehab bills ran from August 2025 to July 2026 can claim August 1, 2025 to July 31, 2026 on the 2026 return and clear the threshold once instead of twice.
When the patient dies, the window stretches to any 24 month period that includes the date of death canada.ca. If the final return is already filed and the estate pays more bills inside that window, the Folio says the legal representative can ask the CRA to adjust it
canada.ca. See the final return guide for the rest of that return.
What gets a medical claim rejected?
Reimbursed amounts are the most common problem. Your client can claim only the part nobody reimbursed, so subtract the insurance or group plan payout. The exception is a reimbursement taxed as income, such as one shown on a T4, which can still be claimed canada.ca.
Over the counter drugs, vitamins and supplements don't qualify, even when a doctor prescribes them; vitamin B12 for pernicious anaemia is the exception. Prescription drugs must be recorded by a pharmacist, purely cosmetic procedures are out, and private health plan premiums qualify only when 90% or more of the plan's premiums go to eligible medical expenses canada.ca.
Travel has two distance tests. Transportation costs need a trip of at least 40 kilometres from home for care not available locally, and other reasonable travel costs such as meals and lodging need at least 80 kilometres canada.ca. Receipts must name the company or person paid
canada.ca.
Who also gets the refundable medical expense supplement?
A working client with low family income gets cash back on top of the credit. For 2026 the supplement is capped at $1,534, needs at least $4,478 of employment and business earnings, and is reduced by 5% of adjusted family net income above $33,960 canada.ca. Section 122.51 sets it at 25% of the allowable medical expenses plus 25% of any disability supports deduction, and your client must be 18 or older and resident in Canada all year
laws-lois.justice.gc.ca. It goes on line 45200
canada.ca.
| Step | Arithmetic | Result |
|---|---|---|
| Threshold | 3% of $38,000 | $1,140 |
| Allowable expenses | $6,000 minus $1,140 | $4,860 |
| Federal credit | $4,860 times 14% | $680.40 |
| Supplement before reduction | $4,860 times 25% (cap $1,534) | $1,215.00 |
| Reduction | 5% of ($38,000 minus $33,960) | $202.00 |
| Refundable supplement | $1,215.00 minus $202.00 | $1,013.00 |
That example is a single employee with $38,000 of employment income and net income, paying $6,000 of medical costs in 2026. The supplement reaches its cap once allowable expenses hit $6,136, and it phases out completely at $64,640 of adjusted family net income for a client at the cap.
Sources
Do children under 18 get their own 3% threshold?
No. Their expenses go on line 33099 with your client's and the spouse's, and one threshold based on the claimant's net income applies to the whole group canada.ca. Only adult dependants on line 33199 get a separate threshold.
Can a parent claim medical expenses an adult child paid?
No. The expense must actually be paid by the person claiming it, or by their legal representative canada.ca. If the adult child paid, the child claims it on their own return.
Is the medical credit reduced under the alternative minimum tax?
Yes. Section 127.531 allows only half of the medical expense credit when computing minimum tax laws-lois.justice.gc.ca. A client with a large capital gain and big medical bills in the same year should be checked against the AMT rules.
Can attendant care and the disability tax credit both be claimed?
Yes, within a limit. Paragraph 118.2(2)(b.1) lets your client claim attendant care for a person who qualifies for the disability amount under section 118.3, up to $10,000 a year ($20,000 in the year of death) laws-lois.justice.gc.ca. See the disability tax credit page before choosing. The same approval is the gate for the RDSP grant and bond.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.