Can You Get Tax Credits for the Insurance Premiums You Pay?

You may pay insurance premiums for your car, home, life, and health. Did you know that you may be able to get tax credits for some of these payments – mainly medical expenses?

Fortunately, in Canada, we have a publicly funded healthcare system where all Canadians have reasonable access to many health services, without having to pay out-of-pocket (yeah, Canada!). Some of these things include appointments with your family doctor, visits to an emergency room, medical tests, and surgeries.

Services not provided by the healthcare system are things like dental services, eyeglasses, and laser eye surgery. Most people pay for these personal health services out-of-pocket, through their employer, or through private health insurance plans.

Besides healthcare, the government also provides tax support for health-related costs. This means that the government offers tax credits for disability, medical expenses, and deductions for private health insurance premiums for the self-employed, amongst other things. Did you know that if you had to travel outside of Canada for medical needs, then you could claim that as a medical expense when you were filing your taxes? Or, if you had celiac disease and could only consume gluten-free products, did you know that you could claim the extra cost of purchasing gluten-free food as a medical expense? Visit the CRA website for more information.

What If I Receive Health Benefits from my Employer?

If you happen to work for a company that pays for your health plan, then those costs cannot be claimed as health expenses, since they would be paid for directly through your plan or reimbursed to you.
Although you cannot claim plans paid by your employer, you can claim what you pay out-of-pocket. This means that all eligible medical expenses not covered by a health insurance plan may be claimed. For example, let's say you went to the dentist. Your charges were $500, but your health insurance plan (paid by your employer) only reimbursed you for $300. You can then claim $200 since that is what you paid out-of-pocket. Remember, you can only claim the portion of the premiums you pay yourself, not any amount covered by your employer.

Other qualifying medical expenses are premiums you pay for yourself, your spouse, common-law partner, or for anyone you are connected to by blood to a private health services plan (PHSP). These expenses can be claimed on your income tax and benefit return. Refer to the CRA website for more details.

What If I am Self-Employed and I Offer Benefits to my Employees?

As a self-employed individual, you are in a unique situation. If your business has employees and you happen to be providing them with a health plan (that is not taken from their pay), then you can claim the premiums – as long as they are considered to be a reasonable business expense. Your employees, on the other hand, cannot.
If you do not have any employees, you may be eligible to deduct premiums that you pay for medical and dental insurance coverage for yourself, your spouse, and your dependents. Refer to the CRA website for more details.

If I am Self-Employed, Can I Claim my Car Insurance Premium?

When it comes to your car insurance, you may be able to claim this cost as it is associated with your business travels. The Canada Revenue Agency allows self-employed individuals to add "other vehicle expenses" to their tax deduction. These expenses include insurance, fuel, and lease expenses, amongst other things. But again, you can only claim what you use for business purposes only*.

If I am Self-Employed, Can I Claim my Home Insurance Premium?

You may be able to claim part of your home insurance premium as it relates to your workspace. Make sure it meets CRA requirements, though. Refer to the CRA website for more details.

Can I Claim Home Insurance Premiums on Rental Properties That I Own and Rent Out?

Yes, you may be able to claim property insurance premiums paid towards coverage on your rental property for the current year. If you are renting out a separate property you can claim the full amount. If you are renting out only a part of your principal residence, then you can only claim a portion. Refer to the CRA website for more information.

Life & Health Insurance Offered by TD

TD Accident and Sickness Insurance can provide financial coverage to help you and your family in the event of a covered critical accident or illness resulting in disability, a serious injury, or death. Supplement any existing coverage you may already have through life insurance, employee benefits, or your provincial health care plan. Although these payments may not be tax deductible, benefits are received tax-free.

Learn more about Critical Accident, Accidental Death, and/or Accident Disability

Legal

*Check with TD Insurance to make sure your business activity is covered, so that we can ensure we are providing you with the right coverage.

Sites used:
https://www.canada.ca/en/health-canada/services/canada-health-care-system.html
https://www.canada.ca/content/dam/cra-arc/formspubs/pub/rc4065/rc4065-17e.pdf
https://www.canada.ca/en/financial-consumer-agency/services/financial-toolkit/taxes/taxes-3/3.html
https://laws-lois.justice.gc.ca/eng/acts/I-3.3/
https://www.sunlife.ca/ca/Learn+and+Plan/Money/Insuring+your+health/Are+you+entitled+to+a+tax+refund+for+your+medical+expenses?vgnLocale=en_CA
https://www.sunlife.ca/ca/Learn+and+Plan/Money/Insuring+your+health/Employee+benefits+Taxable+or+not?vgnLocale=en_CA
https://www.sunlife.ca/slfas/Strategies+and+concepts/Tax+and+legal/Canadian+Health+Insurance+Tax+Guide?vgnLocale=en_CA
https://www.sunnet.sunlife.com/files/advisor/english/PDF/SLF1182_HealthTaxGuide_Ch6_IOIP_Print.pdf
https://www.sbis.ca/are-health-insurance-premiums-tax-deductible-in-canada-for-the-self-employed.html
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-229-other-employment-expenses/commission-employees/work-space-home-expenses.html