Cross-Border Medical Expenses: Where Do I Claim Them?

Medical expenses are one of the few items where both Canada and the US offer tax relief to individuals, but the mechanics are different. Canada provides a non-refundable tax credit (the Medical Expense Tax Credit, or METC) worth approximately 15% federal plus a provincial component. The US provides an itemized deduction for medical expenses exceeding 7.5% of adjusted gross income (AGI). For cross-border taxpayers who incur medical costs in both countries, the question is where to claim each expense and how to maximize the combined benefit.

Canadian METC: how it works

The Medical Expense Tax Credit (ITA 118.2) allows you to claim qualifying medical expenses that exceed the lesser of 3% of line 23600 (net income) or a fixed dollar threshold ($2,759 for 2025). The credit is 15% federal on the amount above the floor, plus a provincial credit (typically 5-10% depending on the province).

What qualifies in Canada:

• Payments to medical practitioners (doctors, dentists, optometrists, physiotherapists, psychologists, and other practitioners authorized by provincial law)
• Prescription drugs (must require a prescription; over-the-counter products do not qualify)
• Dental services (all dental work, including cosmetic dentistry in some cases)
• Eyeglasses and contact lenses
• Premiums for private health insurance plans
• Travel expenses for medical care (if you must travel more than 40 km one way)
• Medical devices (hearing aids, wheelchairs, prosthetics)
• Private health services plan premiums (including travel medical insurance)

What does NOT qualify in Canada:

• Cosmetic procedures (unless medically necessary, ITA 118.2(2.1))
• Over-the-counter medications (no prescription)
• Health club or gym memberships
• Non-prescription vitamins and supplements

12-month period: the METC allows you to claim expenses for any 12-month period ending in the tax year. This flexibility lets you group expenses to maximize the amount above the floor.

US medical expense deduction: how it works

The US allows an itemized deduction (Schedule A) for unreimbursed medical expenses exceeding 7.5% of AGI (IRC 213). The deduction reduces taxable income at the marginal rate.

What qualifies in the US:

• Payments to medical professionals (doctors, dentists, surgeons, specialists)
• Prescription drugs and insulin
• Health insurance premiums (including Medicare premiums, but not premiums paid with pre-tax dollars through an employer plan)
• Dental and vision care
• Mental health services
• Long-term care (subject to age-based limits on premiums)
• Medical equipment (crutches, wheelchairs, hearing aids)
• Travel for medical care (standard mileage rate of $0.22/mile for 2025, or actual expenses)
• Capital improvements to a home for medical purposes (ramps, widened doorways), to the extent they do not increase the home’s value

What does NOT qualify in the US:

• Cosmetic surgery (unless related to a deformity from disease, accident, or congenital abnormality)
• Over-the-counter medications (changed by the CARES Act: OTC drugs and menstrual products qualify beginning 2020)
• Health club dues (even if recommended by a doctor)
• Funeral expenses
• Non-prescription supplements (unless prescribed)

The 7.5% floor: the deduction applies only to expenses exceeding 7.5% of AGI. For someone with AGI of $100,000, only expenses above $7,500 are deductible. This high floor means many taxpayers get no benefit from the medical deduction.

Standard deduction trade-off: the US medical deduction is only available if you itemize. With the standard deduction at $15,700 (single) or $31,400 (married filing jointly) for 2025, many taxpayers cannot itemize enough to exceed the standard deduction even with medical expenses. The medical deduction is most useful for taxpayers with very high medical costs or who have other large itemized deductions (state taxes, mortgage interest, charitable contributions).

Cross-border claiming

For a taxpayer who files in both countries (e.g., a US citizen living in Canada, or a Canadian with US-source income), the same medical expense can generally qualify in both countries. However, claiming the same expense in both countries is double-dipping and is not permitted.

The coordination rule: claim each expense in the country where it produces the greatest tax benefit. In practice:

Expenses paid in Canada (Canadian-dollar costs):

• Usually best claimed on the Canadian return (METC), because the 3% threshold is lower than the US 7.5% threshold, and the credit applies even if you do not itemize
• If your Canadian income is very low (and the 3% threshold is very low), the METC credit may be worth less than the US deduction at a higher marginal rate. Run the numbers both ways.

Expenses paid in the US (US-dollar costs):

• If you are a Canadian resident, US medical costs qualify for the METC (medical services from practitioners authorized by the laws of the jurisdiction where the services are provided)
• If you are a US resident filing a Canadian non-resident return, the METC is generally not available (non-residents cannot claim most personal tax credits)
• For US-resident taxpayers, these expenses go on Schedule A if you itemize

Travel medical insurance (snowbird coverage):

• Premiums for travel medical insurance qualify for the METC in Canada
• The premiums may also qualify as a medical expense in the US (health insurance premiums)
• Claim in one country only

Snowbird-specific scenarios

Canadian resident wintering in the US: medical expenses incurred in the US (doctor visits, emergency room, prescriptions) qualify for the Canadian METC. Convert the US-dollar amounts to CAD at the exchange rate on the date of payment. Travel medical insurance premiums (the snowbird policy) also qualify.

US resident visiting Canada: medical expenses incurred in Canada qualify for the US medical deduction (if you itemize). Convert the CAD amounts to USD.

Emergency care while traveling: an unexpected hospitalization in the other country creates a large medical expense in one year. This may push you over the METC or US deduction threshold for that year. Check whether the expense was reimbursed by your provincial health plan, travel insurance, or US insurance before claiming the unreimbursed portion.

Provincial health plan premiums

Some provinces charge health insurance premiums (British Columbia ended its MSP premiums in 2020; Ontario has the Ontario Health Premium, which is a surtax, not a claimable premium). If a province charges a direct health premium, it may qualify for the METC. The US does not charge a direct federal health premium (Medicare premiums paid from Social Security are deductible on the US return).

Provincial drug plans: some provinces offer subsidized prescription drug plans with copayments. The copayments qualify for the METC. If you also have US drug coverage (Medicare Part D), the Part D premiums and copayments qualify for the US deduction.

HSA and TFSA interactions

US Health Savings Account (HSA): if you are a US resident with a high-deductible health plan and an HSA, contributions are deductible, and withdrawals for qualified medical expenses are tax-free. If you move to Canada, the HSA becomes a foreign trust (Canada does not recognize HSAs). You can still withdraw for medical expenses (tax-free in the US), but the withdrawal may be Canadian income if Canada treats the HSA as a foreign trust. Most practitioners treat HSA medical expense withdrawals as non-taxable in both countries, but the position is not explicitly confirmed by CRA.

TFSA: the TFSA is not relevant to medical expenses, but for completeness: if you hold a TFSA and move to the US, the TFSA is a foreign trust and the US taxes the income inside it. Medical expenses paid from a TFSA are not treated differently from any other TFSA withdrawal.

What should I do next?

Collect all medical receipts from both countries. Determine which country’s return produces the greater benefit for each expense. Remember the 12-month claiming period flexibility for the Canadian METC. If you are a snowbird, keep track of travel medical insurance premiums and any out-of-pocket costs incurred in the other country.

• I’m a US citizen living in Canada: what do I file?, the baseline obligations including health plan interactions
• Should I retire in Canada or the US?, the healthcare cost comparison
• Canada vs US tax rates: a side-by-side comparison, for the broader tax comparison including healthcare

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.