As we prepare for the avalanche of paperwork and questions regarding 2013 Personal Tax Returns, educating the customer is one of our primary goals. As the trend to living gluten free continues, it is a lifestyle choice for some and a necessity of life for others. So how do living gluten free and your Canadian tax dollars possibly affect you or someone you know?
According to the Canada Revenue Agency (CRA), persons who suffer from Celiac Disease (gluten intolerance), are entitled to claim the incremental costs associated with the purchase of gluten-free (GF) products as a medical expense.
So what does incremental cost mean? It is the difference between the costs of a GF product compared to a similar non-GF product. An example would be the purchase of a loaf of bread. If the price of a GF loaf of bread is $6.79 and a non-GF loaf is $3.59 the incremental cost would be $3.20. ($6.79 – $3.59).
Bread is just one example of the hundreds, if not thousands of products that are labelled gluten free that would qualify for the medical expense tax credit. Complete sections of grocery and health food stores are dedicated to this growing GF market.
What do you need to be eligible for this tax credit?
1) Confirmation from your doctor in the form of a letter, of your disease and requirement for GF products as a result of the disease
2) Receipts for all the purchases you are claiming
3) A summary calculating the incremental costs for each item claimed
You do not have to submit these when filing your personal tax return but must have all documentation available for submission if requested by the CRA.
Celiac Disease does not qualify for the Disability Tax Credit (DTC).
For additional details regarding the medical expense tax credit, please visit the CRA website.
In all the years I’ve prepared tax returns and used GF products as a medical expense for client returns, I’ve never had a request for proof of purchase or incremental cost breakdown. But as more people become aware of this medical credit, I’m sure the CRA will start to take a closer look.
If you have ever been re-assessed for the GF product credit I would appreciate you sharing with me, the concerns the CRA had and what the outcome was.
As always, I welcome your feedback. Please leave a link back to your own blog too if you have one, via the commentluv feature here on the site.
Until next time,