Massage therapy as an eligible medical expense on your tax return varies by province. If eligible, the expense is calculated through the Medical Expense Tax Return (METC), which leaves you with a tax credit to be applied to any tax owing. Massage therapy cannot be used as a tax deduction directly to your tax return.
Which provinces qualify massage therapy as an eligible expense?
Massage therapist services qualify for the METC in the following provinces:
- British Columbia
- New Brunswick
- Newfoundland and Labrador
- Prince Edward Island
What is the Medical Expense Tax Credit (METC)?
The Medical Expense Tax Credit (METC) is a non-refundable tax credit applied through your personal tax return. Since it is non-refundable, it can be subtracted from your tax owed, but cannot bring your tax balance above 0. If you incur medical expenses that qualify under the Income Tax Act, you may make a claim for this tax credit.
How does the Medical Expense Tax Credit (METC) work?
If you incur medical expenses that qualify under the Income Tax Act, you may make a claim for a tax credit on the amount of expenses that exceeds the lesser of 3% of your net income or $2,397. After, multiply the lowest marginal tax rate of your province (10% for the case of Alberta) + federal (15%) to the amount that exceeds the threshold. This number is your METC.
Example METC Calculation
Net Income = $100,000
Eligible Medical Expenses = $4,000
Province = Alberta = 10% = 0.1
Step 1: $100,000 * 0.03 = $3,000
Step 2: Compare $3000 with $2,397
Step 3: Pick the lower number, therefore, A2 = $2,397
Step 4: $4,000 - $2,397= $1,603
Step 5: $1,603 * (0.1 + 0.15) = $400.75 = METC
In this case, you have a non-refundable Medical Expense Tax Credit amount of $400.75.