How to Claim Medical Travel Expenses Through Your HSA

If you are required to travel to receive medical treatment, as there is no substantially equivalent medical services available near your home, you may be able to claim those costs as a tax deduction. The Canada Revenue Agency (CRA) allows eligible individuals to deduct certain travel expenses related to medical treatment. This is particularly relevant for small business owners using a Health Spending Account (HSA). Here’s how you can maximize your tax savings while ensuring compliance with CRA guidelines.

Who Can Claim Medical Travel Expenses?

According to the CRA, you can claim travel expenses if:

• You had to travel at least 40 km (one way) from your home to receive medical treatment that was not available locally.
• If the travel distance exceeded 80 km, you may also be able to claim accommodations and meals.
• The treatment must be from a legally authorized medical practitioner or at a publicly recognized medical facility.

This applies whether you are an employee, a self-employed individual, or a small business owner enrolled in an HSA.

What Medical Travel Expenses Are Eligible?

The CRA allows you to claim the following expenses to be applied to your HSA:

Transportation

• Public transit fares (bus, train, taxi, or rideshare) greater than 40km from your home, or
• Vehicle expenses (fuel, maintenance, insurance) based on mileage rates set by the CRA if public transportation is not readily available.
• Northern Residents may qualify for airfare if no reasonable alternative exists

Accommodation & Meals

• Hotel costs if you need to stay overnight
• Meals, claimed either as actual expenses with receipts or using the CRA’s simplified meal rate ($23 per meal, up to $69 per day per person) CRA Meal and Vehicle Rates (for accommodation and meals, the distance must exceed 80 km in a reasonably direct route)

Companion Expenses

• If a doctor certifies in writing that you required assistance for medical travel, you may claim travel costs for an accompanying individual. (This must be supported by a written statement from a medical professional confirming necessity)

How to Claim Medical Travel Expenses?

1. Keep Detailed Records: Maintain receipts for all eligible expenses, including fuel, tickets, hotel stays, and meal receipts. If claiming mileage, note the date, destination, and kilometers traveled.
2. Get a Doctor’s Note to Support your Companion Claim: As well, ensure a written statement from a medical professional confirming that your require support for travel for your accompanying individuals travel costs.
3. Submit your Medical Travel Expenses Through Frontier HSA: If you have an HSA with Frontier, you can submit eligible medical travel expenses directly through the app with the appropriate paperwork. Using the Frontier HSA app, you can upload receipts and required documents, making it easier to get reimbursed efficiently.

Real-World Example: How a Business Owner Benefits from an HSA

Scenario: John, an incorporated business owner, had to travel 250 km for specialized treatment. He stayed overnight, and his eligible expenses included:

• Fuel costs (CRA mileage rate at $0.72/km for first 5,000km) → $180 ($0.76 in NWT, Yukon, and Nunavut)
• Hotel stay → $150
• Meals (CRA simplified rate: 2 days x $69/day) → $138
• Total medical travel expenses: $468

By submitting these expenses through his Frontier HSA, John ensures they are 100% tax-deductible, instead of claiming the METC, which offers only partial tax relief.

Maximize Your Savings with Frontier HSA

While individuals can claim medical travel expenses through the METC, which only provides a small personal tax deduction, an HSA positively impacts both corporate and personal tax costs. Medical expenses are paid through the corporation for employees, making them 100% tax-deductible and removing the need to use after-tax personal income.. This effectively converts personal expenses into business expenses, maximizing tax efficiency.

Final Thoughts

Medical travel expenses can often be unexpected, and add up quickly, but by understanding CRA rules and leveraging tax-efficient tools like an HSA, Canadian business owners can reduce their tax burden and keep more money in their pockets. Keep good records, follow CRA guidelines, and get with Frontier to explore more ways to save money.

Get started today at frontierhsa.ca