Tax Tips for People with Diabetes

Tax tips for people with diabetes

If you are like me, you aren’t overly excited by tax time. The thought of paying in more money is so depressing that you are probably digging through every receipt trying to figure out how you can write off that last Ice-cap from Tim Hortons as a diabetes-related expense. Here are a few tax tips that you may have overlooked.

Diabetes supplies

Keep all of the receipts for your diabetes supplies such as:

  • insulin
  • syringes
  • test strips
  • ketone strips
  • alcohol wipes
  • medical tape
  • Glucagon kit
  • pump supplies including the insulin pump, tape, infusion sets, reservoirs, batteries, and mastisol 
  • Continuous Glucose Monitor, transmitters, and batteries

If you have paid out of pocket for these items or a co-pay after insurance, make sure that you have a prescription for them.

Travel

You can claim the cost of travel to medical appointments.

In Canada you must travel at least 40 km one way to get to your appointment. Make sure that you have a signed letter from the office before you leave stating that you have been there. You will then be able to deduct the cost of public transportation or vehicle expenses.

If you must travel over 80 km one way, you will also be able to claim the cost of meals. You are allowed up to $17 per meal up to a maximum of $51 per day. You can learn more here.

Finally, you can also claim your accommodations and parking fees for travel over 80km. Again, make sure that you have a letter stating that you have traveled for medical appointments.

In the US, you can deduct 23 cents per mile in lieu of gas and oil, plus any parking fees and tolls for travel to medical appointments. If you take a taxi, bus, train, airplane or ambulance you can deduct the actual expense. You can deduct the cost of any accomodations, but unlike Canada, you cannot deduct the cost of meals.

In the US, these expenses must exceed 7.5% of your gross annual income. The amount will rise to 10% in the 2019 tax year. For those living in Canada, medical expenses must be above the lesser of $2,208 or 3 percent of your net income.

HSA/FSA

If you live in the USA, you can also save by contributing to a Health Savings Account (HSA) or a Flexible Spending Account (FSA).

These accounts are managed by financial institutions and accessed in the same way as you access your chequing account.

Both a Health Savings Account and a Flexible Spending Account are made up of tax-deductible contributions with pre-set contribution limits. Contributions can be set up through your employer. Both accounts also share the same list of “qualified expenses”.

The difference, however, is in who is eligible. Anyone can contribute to an FSA but only those with a high deductible ($1,350 or more for an individual or $2,700 or more for a family in 2018) health plan are eligible for the Health Savings Accounts. 

The maximum contribution to an HSA is $3,450 for an individual and $6,900 for families.  The maximum contribution into an FSA is $2,650. (at the time of this writing)

Disability Tax Credit

In Canada, we do not have Health Savings Accounts. We do however have a Registered Disability Savings Plan. To access this plan and the associated government grants, you must first apply for and be approved for the Disability Tax Credit (DTC).

The DTC is a non-refundable tax credit that reduces your taxable income. To qualify, you must be insulin-dependent and spend over 14 hours per week on your care.

See if you might qualify for the DTC here.

To make sure that you have all of the receipts you need, download our checklist before you start your tax return this year!

The Disability Tax Credit for Adults…What you need to know

Disability Tax Credit tips

The Disability Tax Credit is a non-refundable tax credit available to Canadians who meet very strict criteria set out by the Canadian Revenue Agency.

One of the criteria is that you must take over 14 hours per week to perform life-sustaining therapy. This is the section that many people living with diabetes qualify under.  Before you apply there are a few things that you need to know.

Having diabetes doesn’t mean that you qualify.

Not everyone with diabetes will qualify for the Disability Tax Credit (DTC).  The criteria states that children with Type 1 diabetes do qualify based on diagnosis alone. Adults (anyone over 18 years of age) however, must show that they spend over 14 hours per week on their care.

Take our quick quiz to see if you might qualify.

Why do children get the DTC so easily?

toddler from Diabetes Advocacy

The reason that children qualify for the Disability Tax Credit is because CRA feels that the time that they spend on their care AND the time that their parents spend on their care, together is equal to more than 14 hours per week.  Adults do not require the help of others for the most part. They, therefore, must prove that they, themselves spend over 14 hours per week on therapy to keeping themselves alive.

Get our workbook to see if you spend over 14 hours per week on eligible tasks. 

Do I really spend 14 hours per week keeping myself alive?

That is a question that only you can answer.  I will say that if you are intensively managing your diabetes, then more than likely, you do take an inordinate amount of time out of your day to manage your diabetes care.

A person who is not reliant on an external source of insulin to live does not have to be concerned about blood glucose readings, anticipated activity levels, impending illness,  or fat contents of meals when planning their day to day activities.  The average person does not have to draw up a syringe, put in an infusion set or calibrate a continuous glucose monitoring sensor.  A person without diabetes does not have to keep track of their insulin requirements, blood glucose levels or activity levels in a journal.

These tasks are commonplace for a person with diabetes. They are also all tasks that are recognized by CRA and count towards the 14 hour total required to be certified for the Disability Tax Credit as requiring life-sustaining therapy.

I hear that adults no longer qualify so why should I try?

diabetes is hard Diabetes Advocacy

Some adults are experiencing a harder time getting the tax credit.  There can be many reasons for your application being denied.  You may be including tasks that are not recognized by CRA as being an allowable part of therapy.  Things like grocery shopping, doctors appointments and trips to the pharmacy are not allowed to be included in your total.

Another reason that adults are being turned down is that they are not providing enough details on their own specific care.   Use the information found online and in groups as a guideline. You should then fill out the T2201 application in your own words with your own specific care details.  

Final thoughts

final thoughts from Diabetes Advocacy

Make your application your own.  Spend one week detailing what you do each day.  It will take you time to stop and write everything down but it will be worth it.  Time each task.  Note how often you perform it. If you have trouble deciding what to document, our workbook or spreadsheet might help you.

Take this week’s worth of information and then compare it to your online resources.  Eliminate the tasks that CRA won’t approve.  Add in the tasks that you did but forgot to add in your personal list.  Now total your time spent.  

Most likely, you will find that you spend more than 14 hours per week on your care.  This data can also be shared with your doctor at your appointment. It will help he/she understand who much time you do put into your care.  This will further be of use if he/she if they receive a follow-up letter from CRA asking for more details on your care.

Adults with insulin dependent diabetes who test regularly (6+ times per week), who inject insulin multiple times per day through injections or an insulin pump, and make their own adjustments to their insulin regimen should apply for the Disability Tax Credit.  If you are turned down, you have the right to ask for your application to be approved by another CRA staff member. Sometimes the second review still does not turn out in your favour but don’t despair. At that point,  you have the right to see all correspondence used in your file and begin a formal appeal process.

If you are unsure of how to fill in your application or you just want someone to review your totals, I can assist you. Email me , check out the Disability Tax Credit page or check out our helpful downloads for more information.