Is Psychotherapy Tax Deductible in Canada?

Is Psychotherapy Tax Deductible in Canada

Psycho-behavioral therapy, often called counseling or talk therapy, is an important component of primary care for individuals with mental illness Unlike physical illnesses, mental health conditions are not always obvious to the naked eye, but its effects can be profound and far-reaching.

To provide relief, the Canada Revenue Agency (CRA) allows you to use the expenses of eligible medical costs such as therapist tax deductions to reduce your tax liability. The higher the amount you claim, the greater the benefit you’ll receive on your tax return.

What are Psychotherapy Services in Canada?

If you’re a resident of Canada, you now have the opportunity to claim the cost of your sessions with a certified psychotherapist on your tax return. This is applicable as long as your therapist possesses a permit to practice.

The cost of personalized therapy for individuals eligible for the disability tax credit is considered eligible. Additionally, rehabilitative therapy is also recognized as an eligible medical expense. 

It’s important to note that therapy must be prescribed and administered by a licensed psychologist, doctor, or nurse, depending on the nature of the mental or physical impairment. While you cannot simply deduct any session you attend, your therapy fees may qualify as a medical expense under specific circumstances. This could potentially reduce your tax burden.

Therapist Tax Deductions Eligibility

1. Diagnosed Mental Health Condition: The therapy you receive must address a diagnosed mental health condition, such as anxiety, depression, PTSD, or other recognized conditions. Therapy for personal growth or general well-being would not qualify.

2. Qualified Therapist: Your therapist must be a licensed professional in Canada, including psychologists, psychiatrists, registered social workers, and registered psychotherapists.

3. Documentation is Key: Keep all receipts and invoices related to your sessions, including monthly subscription fees, additional session charges, and any other relevant payments.

Advocating Change

Numerous mental health advocates and professionals have emphasized the importance of recognizing psychotherapy as a tax-deductible expense in Canada. 

They argue that mental health treatment is equally vital as physical health treatment and should receive comparable financial considerations. With the increasing awareness of mental health issues, there is optimism for potential policy changes in the future that could make psychotherapy tax deductible.

How Do You Calculate Medical Expense Tax Deductions?

First, determine whether 3% of your net income is lower than $2,479. 

Then, add the lowest marginal tax rate in your province to the federal tax rate and multiply it by the minimum threshold. 

Here’s how that will look as a formula: 

Medical Expenses – 3% or $2,479 = X

X (Provincial Rate + 0.15) = Medical Expense Tax Credit

Subtract either 3% of your net income or $2,479 from your medical expenses to get the result, X.

Multiply the result, X, by the sum of your provincial tax rate and 0.15 (representing the federal tax rate).

This calculation will give you the Medical Expense Tax Credit.

Understanding the Deduction Process

When you’re ready to claim your online therapy fees on your taxes, there are a few important factors to consider:

  • Federal vs. Provincial Deductions: You can include qualifying medical expenses on your federal tax return. However, each province has its own rules about what medical expenses qualify for deductions. It’s essential to check with your provincial tax authority for specific details that apply to your situation.
  • The 3% Threshold: Only the portion of your medical expenses that exceeds 3% of your net income can be claimed as a deduction. For example, if your net income is $50,000, you can only claim the portion of your virtual therapy fees that surpass $1,500.
  • Alternative Tax Credits: In addition to medical expense deductions, some provinces offer specific tax credits for mental health services. Depending on your circumstances, these credits might be more advantageous than claiming medical expense deductions.

By considering these points and consulting with your provincial tax authority, you can ensure you’re making the most of the tax benefits available for your online therapy expenses.

Claiming Your Deductions: A Step-by-Step Guide

When claiming medical expenses, it’s important to keep your supporting documents for at least 6 years in case the CRA requests to see them later. Different types of expenses may require different documents, so it’s essential to be prepared. For example:

  • Receipts: Ensure your receipts show your name or the name of the person whose expense you paid for, such as your partner, children, or dependents.
  • Prescriptions: Some medical expenses, like lab procedures, specific medical supplies, and medicines, require a prescription from a therapist. It’s important to note that approved medical practitioners who can provide prescriptions vary by province.
  • Certificate from a Medical Practitioner: For certain medical expenses, you might need a certificate from an approved medical practitioner confirming that you needed to pay for the expense.

Remember, if you’re mailing a paper tax return, you’ll need to attach your receipts when you file. By keeping these supporting documents organized and accessible, you can ensure a smooth process when claiming medical expenses on your taxes.

Helpful Resources:

To access information regarding authorized medical practitioners and medical expense deductions, you can visit the Canada Revenue Agency (CRA) website at: link.

Each province maintains its own tax authority website, providing specific details about medical expense deductions.

Consulting a tax professional can also prove beneficial for navigating the complexities of claiming medical expenses. They can offer personalized advice and guidance tailored to your individual circumstances.

By utilizing these resources, you can ensure that you have the necessary information and support to effectively claim medical expenses on your taxes.

Bottom Line

Remember, deciding to seek therapy shouldn’t only be about therapist tax deductions benefits. The real value of therapy lies in its ability to enhance your mental health and overall well-being.

Whether or not your psychtherapy fees can be deducted from taxes, it’s essential to consider the long-term investment you’re making in your mental health and quality of life.

By understanding the eligibility requirements, the deduction process, and available resources, you can make the most of potential tax benefits while prioritizing your mental health journey.

So, take a moment to relax, gather your documentation, and explore the possibility of claiming your online therapy fees. Remember, investing in your mental health is always a wise choice.


What can i write off as a therapist?

In Canada, unfortunately, tax deductions for psychotherapists are not eligible for therapy sessions they provide to clients for their taxes.

However, psychologists operating as private practices may be eligible to claim certain business-related expenses on their tax return. The Canada Revenue Agency (CRA) outlines these under “business or professional expenses”.

Here are some examples of common deductible expenses for psychologist practices:

  • Office expenses: Rent, utilities, furniture, equipment (computers, printers, etc.)
  • Professional fees: Accounting fees, legal fees, licensing fees, dues to professional associations
  • Marketing and advertising costs
  • Business phone and internet
  • Continuing education
  • Insurance
Can I claim therapist tax deductions in Canada?

Regrettably, psychotherapy is typically not categorized as a tax-deductible medical expense in Canada. The Canada Revenue Agency (CRA) specifies eligible medical expenses that individuals can claim on their tax return.

What is the medical expenses tax deduction in Canada?

The medical expenses tax deduction in Canada refers to the Medical Expense Tax Credit (METC), a non-refundable tax credit that allows Canadians to claim certain medical expenses on their personal tax return. This credit can be subtracted from the tax owed, provided it doesn’t exceed zero.

Are medical expenses tax deductible in Canada?

Yes, most tax deductible expenses for therapist are eligible in Canada. However, there are exceptions, such as cosmetic, veterinary, and non-prescription services.

How much medical expense can I claim on my taxes?

The maximum amount of medical expenses that can be claimed for tax deduction is determined by either 3% of your net income or $2,479, whichever is lower.

Can I carry over medical expenses for taxes?

Yes, you can carry over medical expenses for taxes if they were incurred within 12 months of the end of the current tax year. However, it’s important to ensure that these expenses were not claimed in the previous tax season before adding them to your current return.

Do I have to attach medical receipts to my tax return?

If you’re filing a paper tax return, medical receipts must be attached. However, if you’re filing electronically, keeping receipts is necessary, but attaching them is not required.

Is it worth claiming medical expenses on taxes Canada?

As for whether it’s worth claiming medical expenses on taxes in Canada, it depends on your individual situation. Generally, if you have significant medical expenses that exceed the threshold set by the Canada Revenue Agency (CRA), it may be beneficial to claim them as deductions on your tax return. However, it’s essential to carefully review the eligibility criteria and consider consulting with a tax professional to determine the best approach for your specific circumstances.