Claiming Your Health & Dental Insurance Premiums with the Medical Expense Tax Credit (METC)

Did you know that in Canada, you may be able to get a tax break just for paying your Extended Health and Dental Insurance premiums? It’s true, and it all comes down to something called the Medical Expense Tax Credit (METC).

If you’re like most Canadians, the METC isn’t exactly top of mind. But it’s worth knowing about, because it can put a little money back in your pocket at tax time.

For a deeper dive into exactly how the METC is calculated, check out our guide.

What Counts (and What Doesn’t)

Here’s the key distinction:

• Personally paid premiums for Extended Health and Dental Care plans are eligible under the METC.
• Employer-paid premiums do not qualify, because you didn’t pay them out of pocket.

If you purchase your own health or dental insurance plan, those premiums can be added to your other eligible medical expenses when you file your taxes.

A Simple Example (Alberta Resident)

Let’s say you live in Alberta and pay $1,200 per year for a personal Health and Dental plan.

Here’s how the METC might work out:

1. The METC allows you to claim eligible expenses that are more than 3% of your net income (or a set dollar amount, whichever is less).
   
   • If your net income is $50,000, then 3% = $1,500.
2. Since your $1,200 in premiums is less than that threshold, you wouldn’t see a benefit from the premiums alone.
3. But when you add your $1,200 premiums to other medical expenses (like prescriptions, vision care, or dental bills), the total often pushes you over the threshold.
4. Anything above that threshold becomes eligible for the federal credit (15%) plus the provincial credit (10% in Alberta).

For example:

• $2,000 total medical expenses – $1,500 threshold = $500 eligible amount
• Federal credit: $500 × 15% = $75
• Alberta credit: $500 × 10% = $50
• Total tax savings = about $125

It may not sound huge, but it helps reduce the sting of medical costs, especially when you add premiums to everything else you’re already claiming.

(Note: these figures are for illustration only. Actual amounts will vary based on your income, province, and expenses. Tax software or an accountant can calculate the exact numbers for you.)

Why This Matters

Think of the METC as a little “thank you” from the tax system for taking care of your health. If you’re already paying for insurance, you might as well get credit for it.

And remember: you don’t need to figure it all out manually. Most tax software will calculate it for you once you enter your premiums and other medical expenses.

Ready to Explore Your Options?

Health and Dental Insurance can help protect your family’s finances while also giving you a chance to benefit from the METC.

Why not take a few minutes today to see what plans are available? With Aeva, you can quickly compare Health and Dental care plans in Canada and find the one that’s right for you.