My wife has a medical plan in the USA from her employer.
The premium we pay is deducted from her pay check pre-tax.
Her W2 income is reduced by the amount of the premium paid.
She is a non resident in the USA
When I file my/her taxes in Canada can I deduct the medical plan premium from the USA as a medical expense deduction in Canada?
this is confusing since the amount is pre tax in the USA
Thanks
s
pre tax medical premium
Moderator: Mark T Serbinski CA CPA
Yes. Technically she shoudl ad the amount to hwer wages (just like she would add her 401(k) contributions, and then use it as a deduction. This exactly how it would be treated if she were working in Canada too.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Thanks!
this actually works in our benefit
it seems to not raise her tax liability in Canada due to low income and daycare deductions
and i can deduct the medical expenses for the family from my income
So overall it lowers our taxes
it seems to not raise her tax liability in Canada due to low income and daycare deductions
and i can deduct the medical expenses for the family from my income
So overall it lowers our taxes
Medcial expenses for the family can be deducted by either spouse. Whichever spouse deducts them howwever, uses their eincome to determine the threshhold for those expenses.
All tax software makes this decision. do not do your taxes by hand.
All tax software makes this decision. do not do your taxes by hand.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
i used one
BTW CRA agents had no idea what to do in this case.
I got transferred several times and they were not sure if i should add the amount to the income and deduct it or
if i should report the income showed on the W2
They did mention the 401(k) but claimed its not similar...
on one hand they claimed the income reported should be the same as the W2 and the usa tax return other wise i would have issues with the foregin tax credit on the other hand they said I need to report all income
Thanks again
--s
I got transferred several times and they were not sure if i should add the amount to the income and deduct it or
if i should report the income showed on the W2
They did mention the 401(k) but claimed its not similar...
on one hand they claimed the income reported should be the same as the W2 and the usa tax return other wise i would have issues with the foregin tax credit on the other hand they said I need to report all income
Thanks again
--s
I've given you the correct answer.
For the medical premium You EITHER include the premium in her income (add it to the wages on W-2) and then take it as a medical expense, or you exclude it from her wages and do NOT take it as an expense.
Personally, I would do the first, but I have no problem with te second.
What you cannot do is exclude the premium for her wages AND also take it as a deduction.
For 401(k), you have no choice: you MUST add the contribs back into your wages and then determine how much of it is deductible on the RCA form.
For the medical premium You EITHER include the premium in her income (add it to the wages on W-2) and then take it as a medical expense, or you exclude it from her wages and do NOT take it as an expense.
Personally, I would do the first, but I have no problem with te second.
What you cannot do is exclude the premium for her wages AND also take it as a deduction.
For 401(k), you have no choice: you MUST add the contribs back into your wages and then determine how much of it is deductible on the RCA form.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing