Is Autism Treatment Tax Deductible?
In a word, Yes.
For a more detailed look at finances, please consult Autism Funding in BC .
This website is written by a local parent and covers an overview of financing options for parents in BC.
Open letter from Doug Querns expressing an opinion on this topic. Doug is an accountant, member of FEAT BC, and parent ot two boys with autism:
Is Autism Treatment Tax Deductible? Below is open letter from Doug Querns expressing an opinion on this topic. Doug is an accountant, member of FEAT BC, and parent ot two boys with autism.
With respect to most families I am aware of out here, the therapist and consulting costs have been approved as medical expenses. A “prescription” from your GP is generally all that is required. Resolution 14 of the February 1999 federal budget will alleviate your problems with respect to therapy costs as long as your grandson qualifies for the disability tax credit and the therapy is “prescribed” by a medical practitioner registered to practice in the province of Ontario:
“That, for the 1999 and subsequent taxation years, there be added to the list of expenses eligible for the medical expense tax credit…..
(b) remuneration paid for therapy administered to an individual in respect of whom the disability tax credit may be claimed if (i) the therapy is prescribed by, and administered under the general supervision of (A) a medical doctor or a psychologist in the case of mental impairment, and (B) a medical doctor or occupational therapist, in the case of a physical impairment (c) remuneration paid for tutoring services that are rendered to, and are supplementary to the primary education of, an individual who (i) has a learning disability or a mental impairment, and (ii) has been certified by a medical practitioner to be a person who, because of that disability or impairment, requires those services”
This change is very important for individuals with disabilities particularly since therapy is not defined, as long as it is under the general supervision of a medical doctor or psychologist. I believe this clearly spells out coverage for ABA therapy as well as other therapies. The ability to claim for tutoring services only requires that the individual be medically certified with a learning disability which would include a number of disorders outside the Autism spectrum as well. Tutoring services is also not defined and therefore could be interpreted quite broadly. What this basically requires is a letter from your GP “prescribing” this treatment. The other way of handling the medical claims is to self-fund a private medical plan. The plan invoices your employer for premiums and the employer reduces your gross salary by the amount of the premium. Your T-4 and deductions are based upon a lower gross salary and your employer does not issue a T-4 supplemental for the premiums because they are an allowable deduction for the company under the income tax act. You issue the invoices to the plan for your therapists etc. and the plan pays them. They take a percentage for administration, usually 10%. As I mentioned earlier, there are two ways to claim medical expenses and the first we have discussed. The second method, and by far the most cost effective is utilizing a private medical plan. Premiums for a private health services plan are deductible as en expense for employers and are not considered to be a taxable benefit to the employee. Therefore, consider this:
– Scenario 1 – An employee makes $4,000 per month. This person pays $1,000/month for their medical expenses out of their take home pay after deductions. This $12,000 results in a total tax credit of $2,684 at 17% tax credit after $1,440 deduction ($48,000 x 3%) and payment of $12,000 in expenses.
* Scenario 2 – An employee has their employer pay $1,000/month premium to a private plan. The employee’s deductions are now calculated on $3,000/month. The plan, which generally charges 10% service charge, pays back $900/month of your medical expenses to you and your take home pay is only reduced by $612/month. You don’t include anything on your tax return as this reduction occurs at source. Your employer pays less EI and CPP as their payments are based upon the size of your deductions. The tax reduction alone in Scenario 2 is $4,787 representing over $2,000 in tax savings and approximately $2,500 in additional annual recovered medical costs. There are a number of individuals who can set up this plan and it works very well and very simply. I can probably refer you to someone if you need assistance.
If you have any other questions please feel free to me e-mail me at “firstname.lastname@example.org” or at “email@example.com”.
Doug Querns, parent of two autistic boys.