If you were considering cosmetic surgery, teeth whitening, hair transplants or Botox injections and hoping that the expenses would be eligible for the Medical Expense Tax Credit, you may be too late.

In 2010, the Medical Expense Tax Credit reduces the federal tax of a claimant by 15 per cent of eligible non-reimbursed medical expenses in excess of the lesser of $2024 and three percent of net income. You would be able to claim an amount under the credit if you have a disability or an existing medical condition. Since the rules were not clear as to exactly what could and could not be claimed, some tax payers had taken legal action to try and claim expenses paid for personally elected cosmetic procedures.

The Budget attempted to clarify the intent of the rules by stating that expenses incurred for purely cosmetic procedures (including related services and other expenses such as travel) are ineligible to be claimed under the Medical Expense Tax Credit. This includes both surgical and non-surgical procedures that are undertaken to enhance appearance such as Botox injections, liposuction, hair replacement and teeth whitening. This also means that these expenses will no longer be considered eligible expenses in health spending accounts.

However, cosmetic procedures required for medical or reconstructive purposes, such as surgery performed as a result of a personal injury or disfiguring disease will still qualify.

5 Comments for this entry

• Catherine May 18th, 2010 on 2:49 pm

  Does anyone know if a microdermabraison WITH dr. prescription for treatment of acne and to reduce facial acne scarring will still be eligible under health spending account?
• tinatehranchian May 23rd, 2010 on 1:12 am

  Dear Catherine,

  If the procedure is prescribed by a doctor, then it should qualify as an expense for health spending account.
• Catherine May 26th, 2010 on 3:07 pm

  Thanks so much,

  What about face products prescribed by a physician and dispensed in his office to treat a medical condition. For example,

  ‘Obagi: Clenziderm’ face products, they are only available from a physicians office but have no DIN. I submitted these to HCSA with dr. prescription.

  Should they be covered?
• tinatehranchian May 27th, 2010 on 11:50 pm

  The question is whether they have a cosmetic or therapeutic purpose. Many dermatologists sell cosmeceutical products in their office that could be interpreted one way or the other. If you already have an HSA, I recommend that you ask your HSA provider as they are the ones who ultimately have to approve the payment.
• Hildegard Landers January 31st, 2011 on 8:11 pm

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