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The Canadian Income Tax Act allows for deductions for medical marijuana

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The Income Tax Act Is Strict on the Deductions for Medications Allowed

The Canadian Income Tax Act allows for deductions for prescription medicines, and the Canada Revenue Agency (CRA) acknowledged in 2015 that this also covered prescriptions for medical marijuana purchased from a licensed producer.

However, over-the-counter medicines and natural medicines, including vitamins, aren’t covered, even if they’re recommended by a doctor. Tax lawyer David Rotfleisch of Rotfleisch & Samulovitch Professional Corporation feels that the CRA definition of health-related expenses is still too limited, and that even over-the-counter medications should be included.

Cold remedies are clearly effective in alleviating cold symptoms, but don’t qualify as medical expenses,” he said in an interview with the Financial Post. “It seems to me that this is an area that needs a loosening of the rules by CRA.”

When it comes to medical marijuana, you can claim what you paid for fresh or dried cannabis, cannabis oils, and cannabis seeds and plants from a licensed producer. But you can’t deduct costs related to growing cannabis or accessories such as:

  • Lights
  • Containers and other storage
  • Fertilizers
  • Vaporizers
  • Pipes
  • Capsules

It goes without saying, or should, that you need to have receipts for any medical marijuana purchases, in case of an audit or review. Producers are legally obliged to provide them, whether they’re paper or digital ones.

Medical Cannabis Tax Claim

To file a tax claim for medical marijuana, you add up the amounts on your receipts and include this total onto any other medical expenses you’re claiming on your T1 Income Tax and Benefit Return.

You don’t have to calculate medical expenses by the calendar year, but you can use any 12-month period ending in the current tax year. If you do your own taxes using tax software, you’ll enter your medical expenses in the deductions and credit area. Or, if a professional does your taxes, simply give your receipts to them.

As for how your deduction is figured out, that’s where it gets a bit complicated. You can claim the total value of your medical expenses (cannabis included), minus either $2,268 or 3% of your total net income, whichever amount is lower.

How to Claim Medical Marijuana on Your Tax Return

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