When it comes to claiming travel expenses under the Medical Expense Tax Credit (METC), many customers assume that the rates for meals and vehicle expenses are updated at the start of each year. However, this isn't the case. The Canada Revenue Agency (CRA) updates these rates periodically based on economic factors such as inflation, rather than at the beginning of the year.
According to the CRA:
"Meal and vehicle rates are reviewed on a periodic basis and are subject to change based on inflation and other economic factors."
Important: METC Travel Rates vs. Business Mileage Rates
A common point of confusion is the difference between the rates for medical travel expenses and business mileage rates, which are not the same.
METC Travel Rates:
These rates apply when you travel for medically necessary treatment that is unavailable in your local area.
The per-kilometre rates vary by province or territory and are typically lower than business mileage rates.
Business Mileage Rates:
These rates are intended for work-related travel expenses and are often higher because they factor in additional business-related costs.
It’s crucial to use the correct rate depending on the nature of your travel, as claiming business mileage rates for medical travel could result in incorrect deductions and potential issues with your claim.
Simplified Method for Claiming METC Travel Expenses
To make it easier for taxpayers, the CRA offers a simplified method for calculating travel expenses related to medical necessity:
Meal Expenses:
The flat rate per meal is $23, with a daily maximum of $69 (2024 rates).
Receipts are not required when using this method, but expenses must be reasonable and comply with CRA guidelines.
Vehicle Expenses:
A flat per-kilometre rate applies, varying by province or territory.
For example, in 2024, the rate for Alberta is 54.5 cents per kilometre, but this may change periodically.
Staying Updated with CRA Changes
Because METC travel rates are not updated at a fixed time each year, it's essential to verify the most recent rates before making a claim. Always refer to the CRA’s official page to ensure accuracy.
For the latest rates and more information, visit the official CRA website:
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-25500-northern-residents-deductions/meal-vehicle-rates-used-calculate-travel-expenses.html
By understanding the differences between medical travel rates and business mileage rates—and staying informed on CRA updates—you can ensure your claims are accurate and compliant with current regulations.