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Incremental Medical Tax Benefit for Celiac Disease

People diagnosed with celiac disease can claim on their annual tax return for the extra cost of the gluten-free diet.

GLUTEN-FREE FOOD TAX CREDIT

The cost comparison between gluten-free and ‘gluten-filled’ equivalents can be considerable. You only have to see the price difference between loaves of bread to get an idea. At least double, if not three times as expensive. That adds up to thousands over a year. A fortune over a lifetime.  You can claim the ‘incremental’ cost back. 

But it’s not an easy process. 

Qualify for the Medical Expense tax credit

You will need a letter from your doctor, nurse or nurse practitioner outlining

  • Date of diagnosis
  • Patient has Celiac Disease
  • Patient needs the gluten-free diet for life
  • Written on professional letterhead
  • You only need to send the letter to the CRA if you are audited.
  •  

Claim the benefit

 

It sounds simple, yet it’s cumbersome. You need to save all your receipts for all gluten-free food items, and calculate the difference between that and the product with gluten.

The CRA defines the incremental cost of gluten-free food as: – 

“The difference in average cost of gluten-free products compared to the cost of a similar product with gluten”.

How to calculate incremental costs

The incremental cost is the difference in average cost between gluten-free products and their gluten-containing counterparts.

  • Let’s say you purchased 20 packages of gluten-free (GF) cookies in a year. First, calculate the average cost of these GF cookies by dividing the total spent by 20.
  • Next, compare this average cost to a similar-sized package of regular gluten cookies. Adjust the gluten cookie price to match the GF cookie package size.
  • Subtract the gluten cookie price from the average GF cookie price to find your incremental cost.
  • Finally, multiply this incremental cost by the 20 packages purchased during the year to determine your total claim for cookies.

Example:

  • GF cookies (20 packages, 240 grams each): Total cost $95.50 or $4.78 each.
  • Gluten cookies (1 package, 575 grams): Price $5.95 or $2.98 for 288 grams (adjusted for size).
  • Incremental Cost: $4.78 – $2.98 = $1.80
  • Total Incremental Cost Claim for Cookies: $1.80 × 20 = $36.01.

 

Other useful tips:

  • Only claim items you have receipts for.
  • Do not “estimate” the cost of a gluten item – you need documentation for your comparable prices when being audited.
  • When it comes to comparable gluten items – you are looking for the BIGGEST and CHEAPEST possible. Throughout the year keep your eyes out for when gluten products go on sale and clip that evidence from a flyer, take a picture or print the information out from a grocery website. 
  • Do claim the cost of GF bread/buns/crusts if they are itemized separately on a restaurant bill.
  • Only claim food for the person in the household diagnosed with CD.
  • Update your “spreadsheet” monthly or quarterly – keeping current means less work at tax time
  •  
  • Another good way to “gluten” shop is to go onto a grocery store website and fill your cart with the gluten foods you need for comparison, print out your cart and then delete it – who wants to order those things? Then use the printout to substantiate where you get your comparison gluten pricing from. Then those BIG and CHEAP items you need to break down in both size and price to be comparable to your GF item category.

  • When looking at your grocery receipts, try and “group” like things together such as cookies, crackers, pizzas, flour, bread, single items (cookie) so they can be compared to a gluten item (relative in size).

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