Are Medical Expenses Tax Deductible? It Depends Which Rule You're Under

One question, three genuinely different answers. This page works out which one is yours and sends you to it.

Which one am I?

Find your situation in the left column. The middle column is what the mechanism is actually called — worth knowing, because searching for the wrong term is how people end up reading guidance that does not apply to them.

More than one row can apply to the same person in the same year — someone in subsidised housing still files a tax return. They are separate calculations using the same pile of paper.

Fork 1 — US, itemised deduction on a personal return

This is the one most people mean by “medical expense deduction”, and it has two gates that have to be cleared together. Missing either is why the answer so often turns out to be no.

The first gate is the floor. Only the portion of your qualifying medical costs above a set percentage of your income counts — everything below that line does nothing at all. So a year of ordinary co-pays and prescriptions frequently produces a deduction of exactly zero, while a year with a surgery or a long hospital stay can produce a substantial one. The percentage is a published figure that has moved historically, and this page deliberately does not print it: a stale number here would be worse than no number.

The second gate is itemising. Medical expenses only reach your return if you itemise deductions rather than taking the standard deduction, and you cannot do both. That means the real question is not “did I spend enough on medical care” but “do all my itemised deductions together beat the standard deduction”. For a large majority of filers they do not, which is the part general advice tends to skip.

Two consequences worth being blunt about. If you take the standard deduction, your medical spending does not affect your federal return at all, no matter how large it was. And reimbursements reduce what counts — the portion your insurance paid back was never your cost, and forgetting to subtract it is the single most common error in this area.

Sources (check the current year's figures directly — checked 2026-08-15): IRS Topic No. 502, Medical and Dental Expenses, IRS Publication 502 (what qualifies), and IRS — About Schedule A (Form 1040) (itemising).

Estimates — confirm with your tax professional.

Fork 3 — Canada, a credit rather than a deduction

Canada does not give a medical deduction. It gives a non-refundable tax credit, and the distinction is not pedantry: a deduction reduces the income you are taxed on, while a credit reduces the tax itself. They are calculated differently and they are not worth the same amount. Non-refundable also means the credit can reduce tax owing to zero but will not, by itself, pay you anything beyond that.

This matters practically, because a great deal of the medical-expense advice online is American. If you file in Canada and you are reading about floors, itemising and Schedule A, you are reading about somebody else's tax system.

The rates, the eligible-expense list and the mechanics live on our CRA medical expense tax credit page.

Official source: the Canada Revenue Agency's guidance on lines 33099 and 33199, eligible medical expenses you can claim on your tax return, at canada.ca. Search that line number on the CRA site for the current year's eligible-expense list and rates.

Estimates — confirm with your tax professional.

What to keep

• Provider statements and itemised bills — the ones showing what the service was, not just an amount owing.
• Explanations of benefits (EOBs) — these are what tie a bill to what insurance actually covered.
• Pharmacy receipts — small, frequent, thermal paper, and gone within a year.
• Mileage to appointments — travel for medical care is treated differently in each of the three regimes, so you need the record before anyone can decide. ExpenseBot estimates distances from your Google Calendar appointments at your country's rate; because it works from calendar addresses rather than GPS, these are estimates. Rates live on mileage tracker.
• Insurance reimbursements — the subtraction people forget. Track them against the bill they relate to.

If what you have is a physical pile rather than a system, the receipt organizer is the place to start digitising it.

Estimates — confirm with your tax professional.

Are my medical expenses tax deductible?

Sometimes, and through more than one mechanism, which is why a single yes-or-no answer is usually wrong. On a US personal return only the portion of your costs above a percentage-of-income floor counts, and only if you itemise rather than take the standard deduction — for most people that combination means the answer is no. If you live in subsidised housing, the same bills can reduce the income HUD uses to set your rent, which is a different mechanism entirely and is not a tax deduction. In Canada, medical costs give a non-refundable credit rather than a deduction. Which one applies to you is a question for your tax professional. Estimates — confirm with your tax professional.

What's the difference between a medical deduction and a medical tax credit?

A deduction reduces the amount of income you are taxed on; a credit reduces the tax itself. They are not interchangeable and they are not worth the same amount. Canada uses a credit for medical expenses, which is the main reason Canadian and US guidance on this topic look so different and should never be mixed together. If you are reading advice about medical expenses, check which country's system it describes before you rely on any of it.

Does this apply if I'm in Section 8 or public housing?

It is a different mechanism, and the confusion is understandable because the same bills are involved. In subsidised housing, qualifying medical expenses can reduce the income figure used to calculate your rent — that is an income adjustment, not a tax deduction, and it can matter even in a year when you owe no tax at all. See the HUD medical expense pages for how that calculation works and what qualifies.

Do I need to keep the actual receipts?

Yes, and in practice this is where people lose the benefit rather than at the rules stage. Every one of these three mechanisms requires a substantiated year of medical spending, and nobody assembles that from memory in March. The pharmacy counter receipts and the mileage to appointments are the first things to disappear. Capture as you go rather than reconstructing later — a shoebox of faded thermal paper is not a record anybody can work from.

Does the mileage to my appointments count?

Travel for medical care is treated differently across the three regimes, so check the one that applies to you rather than assuming a rule you read elsewhere transfers. What is consistent is that you need a record of the trips before anyone can decide. ExpenseBot estimates distances from the appointments in your Google Calendar at your country's rate; because it works from calendar addresses rather than GPS, these are estimates. Confirm the treatment with your tax professional.

What about the part my insurance paid back?

Reimbursed amounts reduce what counts, and forgetting to subtract them is the most common error in this area — it is easy to total a year of bills and quietly claim money you were paid back for. Track the reimbursement alongside the bill so the net figure is visible rather than reconstructed. This applies in all three mechanisms, though the details differ.

I have a shoebox of bills from the last two years and no idea if any of it matters. Where do I start?

Start by working out which of the three situations you are in, because that determines whether the pile is worth anything at all — the answer for a US filer taking the standard deduction is different from the answer for someone in subsidised housing, where the same bills can affect rent regardless of tax. Then get the record into a form somebody can read. Anything that arrived by email can be recovered by scanning your Gmail history; the paper needs photographing. Then take it to your tax professional, or to your housing authority, with a total rather than a shoebox.