The credit most households leave unclaimed
The medical expense tax credit is a non-refundable federal credit for eligible expenses a household paid out of pocket: dental work, prescription drugs, prescription eyeglasses and contact lenses, hearing aids, laboratory fees, and premiums paid to a private health plan, among many others on the CRA's list. Only the portion an insurer did not reimburse counts. Two rules decide whether a pile of receipts becomes a credit or nothing at all. First, expenses are claimable when they are paid in any 12-month period ending in the tax year, and not claimed in a prior year — the window does not have to be the calendar year, and it does not have to match last year's window, provided no expense is counted twice. Second, only expenses above a threshold produce a credit: the amount claimed is total expenses minus the lesser of 3% of the claimant's net income or, for 2026, $2,890. The federal credit is 15% of what remains above that threshold, with a provincial credit calculated similarly on top.
Put those two rules together and December becomes the lever. Because payment date governs, a household controls which 12-month window an expense lands in simply by choosing when to pay the invoice. Because the threshold is a fixed hurdle each claim year, expenses spread thinly across two windows can clear it in neither — while the same expenses bunched into one window clear it once and generate a credit on every dollar above it.
The threshold calculation: why December payments change the answer
Take a household with $2,300 of eligible expenses paid in 2026 and a claimant with $85,000 of net income. The threshold is the lesser of 3% of $85,000 ($2,550) and $2,890 — so $2,550. Expenses of $2,300 sit below it: the claimable amount is zero and the credit is $0. Now add a $900 dental bill for work already planned. Paid in January 2027, it belongs to a 2027 window and changes nothing for 2026. Paid in December 2026, total 2026 expenses rise to $3,200, the claimable amount becomes $3,200 − $2,550 = $650, and the federal credit is 15% × $650 = $97.50, plus the provincial credit. Same care, same total spending, same household — the only variable was the payment date, and it was worth the entire credit.
| Scenario (claimant net income $85,000; threshold $2,550) | Expenses in the 2026 window | Claimable above threshold | Federal credit at 15% |
|---|---|---|---|
| Dental bill paid January 2027 | $2,300 | $0 | $0 |
| Same $900 dental bill paid December 2026 | $3,200 | $650 | $97.50 |
| December payment, claimed by a spouse with $42,000 net income (threshold $1,260) | $3,200 | $1,940 | $291 |
The third row is the claimant effect, and it is larger than the bunching effect. Nothing about the expenses changed — only whose return carries them. That is why the December work is a calculation, not a tidy-up: gather the year's receipts first, then decide both when remaining bills get paid and who claims the total.
Bunching: the pay-now-or-in-January decision
Bunching does not mean inventing medical spending in December. It means taking expenses that are already planned — the dental crown quoted in October, the eyeglasses due for replacement, the orthodontic instalment, the physiotherapy series — and choosing the payment date deliberately. Three checks govern the decision. First, project the household's paid-to-date total against the threshold of the likely claimant: if the total is already well above the threshold, each additional December payment adds claimable dollars at the full amount. If the total is far below the threshold and no plausible payment closes the gap, deferring a discretionary payment into January may instead build next year's window toward its threshold — the same logic, pointed the other way. Second, respect the window: expenses can be claimed in any 12-month period ending in 2026, so a household whose big expenses landed late in 2025 may do better with a window such as November 2025 to October 2026 than with the calendar year. December is the last chance to pay an expense into a window that ends in 2026. Third, never double-count: an expense claimed in one year's window cannot appear in another, and the federal and provincial claims — and any dependants' claims — must use the same period.
Two categories December shoppers forget: premiums paid to a private health plan are themselves eligible expenses, including amounts paid through the year that never produced a single claim; and travel for care that is not available locally can qualify — transportation at 40 km or more one way, and meals and accommodation at 80 km or more one way. Both are already-paid amounts sitting outside the receipt drawer most households check.
Who should claim: run both returns through the framework
Expenses for the claimant, a spouse or common-law partner, and dependent children under 18 are pooled on line 33099 of one return. The standard advice — the lower-income spouse should claim — exists because the 3% threshold falls with income, and H&R Block's published tax tip confirms it is usually the more beneficial choice for a family's own expenses. But "usually" is doing work in that sentence. The credit is non-refundable: it can reduce tax owing but cannot create a refund, so a claimant whose tax owing is already near zero can strand part of the credit the calculation just created. The framework is therefore three steps: compute the threshold for each spouse, compute the claimable amount on each return, then check that the chosen claimant actually has enough tax payable to absorb the credit. Whichever return produces the largest usable credit wins — not automatically the one with the lowest threshold.
One more line belongs in the December review. Expenses paid for other dependants — an adult child, a parent, or another dependant who relied on the claimant for support — go on line 33199, where the threshold is calculated from the dependant's net income, not the claimant's. H&R Block's tip notes the consequence: for dependants over 18, it can be better for the higher-income spouse to claim, because a low-income dependant's small threshold does most of the work regardless of who claims. A household supporting a parent through an expensive care year can leave real money behind by pooling everything onto line 33099 out of habit.
The December checklist: work it in this order
- Total what has already been paid in 2026. Include pharmacy printouts, dental and practitioner receipts, eyewear, and private health plan premiums — only the unreimbursed portion of each. Keep the receipts; the CRA can ask for them, and receipts are required for everything except mileage.
- Compute both thresholds. For each spouse, the lesser of 3% of net income or $2,890 (2026). Note how far the paid total sits from each.
- List planned, unpaid care and choose its payment date. Pay in December the amounts that push the chosen window over the threshold; defer amounts that cannot close the gap if they serve next year's window better.
- Choose the 12-month window deliberately. Calendar 2026 is the default, not the rule — test a window ending later in 2026 against the expense dates before settling.
- Check dependants separately. Any amounts paid for a dependant over 18 belong in the line 33199 calculation, using that dependant's net income.
- Assign the claim and record the window used. Write down the period claimed and the expenses included, so next year's return cannot claim them twice.
What success looks like
By January 2, 2027, the household can state: total eligible expenses paid in the chosen window, which spouse claims them and the claimable amount above that spouse's threshold, the December payments made on purpose (and the ones deliberately deferred), and the window recorded for next year's filing. One unusual case deserves a flag rather than a checklist: for someone who died in the year, expenses can be claimed for any 24-month period that includes the date of death — a wider window that an executor should not let a 12-month habit obscure. Handled in December, the credit stops being a receipt hunt in April and becomes what it actually is: a timing decision with a deadline.