Medical Expense Tax Credit Ontario 2026: The 3% Rule

How we check the numbers: every figure on this page is calculated from official CRA, Statistics Canada or Bank of Canada data and cross-checked with the free calculators on this site — run them yourself to verify.

The short version

The credit is a non-refundable tax credit, not a deduction and not a refund. It reduces tax you owe. The combined Ontario rate is 14% federal plus 5.05% Ontario, or 19.05%, applied only to expenses above the threshold. Note the 2026 federal rate is 14%, not the 15% you will still see in older guides.

How the 3% rule works

Your threshold is the lesser of:

• 3% of your net income (line 23600 of your return), or
• a fixed dollar cap: $2,891 federally, $2,940 in Ontario for 2026.

Subtract the threshold from your total eligible out-of-pocket expenses. Only what is left gets the credit. The fixed cap takes over at higher incomes: 3% passes $2,891 once net income passes $96,367 federally, and passes $2,940 once it passes $98,000 for Ontario. Below those incomes, the 3% figure is your threshold.

Federal and Ontario use their own caps, so at high incomes the two claimable amounts differ slightly. At $120,000 of net income with $6,000 in expenses, the federal claimable amount is $6,000 minus $2,891, or $3,109, for a $435.26 federal credit, while the Ontario claimable amount is $6,000 minus $2,940, or $3,060, for a $154.53 Ontario credit — $589.79 in total.

Worked example: $60,000 income, $6,000 in bills

The math, step by step:

1. Threshold: 3% of $60,000 is $1,800, which is less than both caps, so $1,800 is the threshold.
2. Claimable amount: $6,000 minus $1,800 equals $4,200.
3. Federal credit: 14% of $4,200 equals $588.00.
4. Ontario credit: 5.05% of $4,200 equals $212.10.
5. Total: $588.00 plus $212.10 equals $800.10.

That is 19.05% of the claimable amount — not 19.05% of the full $6,000. The first $1,800 buys you nothing.

Who should claim: the lower-income spouse usually wins

One spouse can claim the family's pooled expenses for themselves, their spouse or common-law partner, and children under 18. Test both returns, but the lower-income spouse usually wins because their 3% threshold is lower.

Same $4,000 in expenses. At $30,000, the threshold is $900, the claimable amount is $3,100, and the combined credit is $434.00 federal plus $156.55 Ontario, or $590.55. At $80,000, the threshold is $2,400, the claimable amount is only $1,600, and the credit falls to $224.00 plus $80.80, or $304.80. One caution: the goal is the largest usable credit. If the lower-income spouse owes little tax, a non-refundable credit they cannot use is worth less than it looks — run both returns before you choose.

What counts, and what does not

Eligible expenses are broad, and the CRA list is not exhaustive. Common ones include:

• Prescription drugs dispensed by a pharmacist, and prescribed medical devices such as hearing aids, prosthetics, wheelchairs and CPAP machines.
• Dental care (exams, fillings, cleanings, dentures, implants) and vision care (prescription glasses, contact lenses, eye exams) — except purely cosmetic dental work such as teeth whitening.
• Practitioner fees for doctors, dentists, physiotherapists, psychologists and other authorized practitioners.
• Private health services plan premiums you pay yourself, including medical, dental and hospitalization plans.
• Travel for treatment where no equivalent service is available locally, under the CRA travel rules — treatment fees and travel costs are tested separately.

What does not count: over-the-counter drugs and vitamins (with narrow exceptions such as vitamin B12 for pernicious anemia), gym memberships, purely cosmetic procedures, and any amount reimbursed by insurance, an employer plan or another program. Only the part you paid out of pocket, and were not reimbursed for, counts. Keep receipts — the CRA can ask for them.

Lines 33099 and 33199, and other dependants

Line 33099 is for yourself, your spouse or common-law partner, and your or your spouse's children under 18. Line 33199 is for other dependants who relied on you for support — parents, grandparents, adult children, grandchildren, siblings, aunts, uncles, nieces and nephews who were resident in Canada at some point in the year. For line 33199, the 3% threshold uses the dependant's net income, not yours, so claiming a low-income parent's bills can still pay even if you earn a lot.

Ontario caps the line 33199 claim at $15,846 of expenses per dependant for 2026. There is no such cap on line 33099. For a person who died in the year, expenses can be claimed for any 24-month period that includes the date of death, if no one claimed them for another year.

Two refundable extras worth checking

The main credit cannot create a refund on its own. These two can pay out even if you owe no tax:

• Federal refundable medical expense supplement (line 45200): up to $1,534 for 2026, or 25% of your allowable medical expenses plus disability supports expenses, whichever is less. You must have been resident in Canada all year, be 18 or older at year-end, have employment or self-employment income over $4,478, and have claimed medical expenses or the disability supports deduction. It is reduced by 5% of combined family net income over $33,960 and is gone at $64,640. Example: $3,100 in allowable expenses gives 25%, or $775, with no reduction if family net income is under $33,960.
• Ontario Seniors Care at Home Tax Credit: 25% of claimable medical expenses up to $6,000, for a maximum of $1,500 per family unit, on top of the federal and Ontario non-refundable credits. You or your spouse must have turned 70 or older in the year and been resident in Ontario at year-end. It is reduced by 5% of family net income over $35,000 and phases out at $65,000. Example: a senior with $30,000 in net income and $6,000 in expenses has $5,100 claimable after the $900 threshold, so the credit is 25% of $5,100, or $1,275, with no income reduction.

Checklist before you file

1. Add up out-of-pocket only. Subtract every reimbursement first.
2. Choose your 12 months. Any 12-month period ending in 2026 works, not just January to December — pick the window with the biggest unreimbursed total, and never claim the same expense twice.
3. Test both spouses. The lower-income claim usually wins, unless they cannot use a non-refundable credit.
4. Check the two refundable credits. Low-income workers and seniors 70 and older have separate tests that can pay cash back.
5. Keep receipts and prescriptions. If the CRA reviews the claim, receipts and, where required, written certification are what support it.

Sources

• TaxTips.ca — 2026 Non-Refundable Personal Tax Credits (federal $2,891, Ontario $2,940, federal rate 14%, Ontario rate 5.05%)
• TaxTips.ca — Refundable Medical Expense Supplement (2026 maximum $1,534, $4,478 earned-income test, $33,960 reduction point, $64,640 phase-out)
• Ontario Budget — Taxation Transparency Report 2025 provisions (Ontario medical expense credit at 5.05%, 2025 base $2,885 and $15,551 other-dependant cap)
• TaxTips.ca — Ontario Personal Tax Credits (Seniors Care at Home: 25% up to $6,000, maximum $1,500, reduced over $35,000, phased out at $65,000)
• TurboTax — Medical and dental expenses for 2026 (lines 33099 and 33199, any 12-month period ending in the year)

Educational content only — not financial advice. Figures are estimates; confirm your own situation with the CRA or a licensed financial advisor. See our Disclaimer.