Claiming Medical Expenses on a Deceased Person's Final Tax Return in Canada

Filing a deceased person's final tax return comes with a few rules that don't apply to an ordinary return, and one of the more valuable ones involves medical expenses on a final tax return. The window for claiming those expenses is longer than usual, which can meaningfully reduce the tax owing on the person's last year of income.

This article walks through how the extended medical expense claim period works, what typically counts as an eligible expense, and what an estate trustee should gather before filing.

The Medical Expense Tax Credit: A Quick Refresher

On an ordinary personal tax return, you can claim eligible medical expenses paid in a 12-month period ending in the tax year, to the extent they exceed a minimum threshold based on income. The credit reduces the tax payable rather than being refunded outright, and it can generally be claimed for the taxpayer, a spouse or common-law partner, and eligible dependents.

Because the income threshold and specific credit calculation are adjusted periodically, don't rely on a percentage or dollar figure you've seen elsewhere — check current CRA guidance or work with an accountant when you calculate the actual credit.

Why the Final Return Gets a Longer Window

For a deceased person's final return, the rules allow you to choose any 24-month period that includes the date of death, rather than being limited to a single 12-month period ending in the tax year. In practice, this means you can look back further and select whichever 24-month window captures the largest amount of eligible medical expenses, then claim that total on the final return.

This flexibility exists because significant medical costs often cluster in the months leading up to a death, and a rigid 12-month window could otherwise exclude expenses clearly connected to the person's final illness. Confirm the exact mechanics with an accountant, since how the calculation interacts with other returns filed for the same estate can get technical.

What Typically Counts as an Eligible Medical Expense

The categories of eligible medical expenses are broad and reviewed periodically by CRA, but commonly include:

• Payments to medical practitioners, dentists, and other authorized health professionals
• Prescription medications
• Medical devices and equipment prescribed by a medical practitioner
• Attendant care or care in a nursing home, in qualifying circumstances
• Travel expenses for medical treatment not reasonably available locally, in qualifying circumstances

This list isn't exhaustive, and eligibility for some categories depends on specific conditions. Always check the current CRA list of eligible medical expenses before finalizing a claim, since categories and conditions can change.

Whose Expenses Can Be Included

Generally, you can include eligible medical expenses paid for:

• The deceased person
• Their spouse or common-law partner at the time
• Dependent children or other dependents who relied on the deceased

The expenses need to have actually been paid — by the deceased, or in some cases by the estate on the deceased's behalf — within the chosen claim period, and you'll need receipts to support whatever is claimed.

A Practical Process for the Estate Trustee

1. Gather every medical receipt for roughly the two years leading up to the date of death — pharmacy records, paid invoices from health practitioners, and receipts for qualifying devices or travel.
2. Organize the receipts by date so you can identify which 24-month window captures the highest total of eligible expenses.
3. Confirm which expenses qualify against the current CRA list, since not every health-related cost is an eligible medical expense.
4. Work with an accountant to calculate the credit and apply it to the correct return.
5. Keep the receipts with the estate's tax records in case CRA later requests supporting documentation.

Frequently asked questions