These are very exciting times for people looking to start or expand their families in Canada. Two new tax credits have come into force for Canadians to use for surrogacy services and fertility treatments.
What are the tax credits?
According to the 2022 Personal Income Tax Measures Budget, the Medical Expense Tax Credit (METC) is a 15-per-cent non-refundable tax credit that recognizes the effect of above-average medical or disability-related expenses on an individual’s ability to pay tax.
The province of Nova Scotia also recently announced a “refundable tax credit equal to 40 per cent of the cost of fertility treatments provided by a Nova Scotia-licensed medical practitioner or infertility treatment clinic and for surrogacy-related medical expense.”
The Nova Scotia Fertility and Surrogacy Rebate (NSFSR) will provide coverage for people seeking assistance with parenthood, including members of the 2SLGBTIQ+ community who previously had no option but to pay the full cost.
How do families qualify?
Medical Expense Tax Credit
For 2022, the METC is available for qualifying medical expenses in excess of the lesser of $2,479 and three per cent of the individual’s net income. Eligible expenses must generally be in respect of products and services received by the patient, defined as the taxpayer, the taxpayer’s spouse or common-law partner or certain dependents of the taxpayer.
The METC had been in place for a number of years, but the definition of an eligible patient has broadened to include:
- the taxpayer;
- the taxpayer’s spouse or common-law partner;
- a surrogate; or
- a donor of sperm, ova or embryos.
For example, an intended parent who pays for in vitro fertilization treatments for a surrogate can be eligible for the METC for the payment of those treatments.
Nova Scotia Fertility and Surrogacy Rebate
The NSFSR is new and further details are expected. So far, the qualifications include “fertility treatments provided by a Nova Scotia-licensed medical practitioner or infertility treatment clinic and for surrogacy-related medical expense,” and a guideline for financial claims.
As per the news release, “there is no limit on the number of treatments that an individual can claim, but the maximum annual claim is $20,000 in eligible costs for a maximum annual tax credit of $8,000.”
Why are these tax credits important?
In Canada it is illegal to pay surrogates or donors for their services. However, the surrogates or donors can receive reimbursement for expenses, such as out-of-pocket medical expenses. The METC allows those medical expenses to be eligible for the tax credit. Some examples are in vitro fertilization or prescription medicine for pregnancy.
The Budget also proposes that fees paid to fertility clinics or donor banks for sperm or ova can also be eligible for the tax credit under METC if those expenses are necessary to becoming a parent.
The METC is only available for expenses within Canada. So, you won’t be able to claim the credit if youtravel to another country for a surrogate or purchase sperm or ova outside of Canada. All expensesclaimed under the METC need to be in accordance with the Assisted Human Reproduction Act.
Similarly, NSFSR will significantly reduce the financial burden on Nova Scotians who are trying to have children and are seeking fertility help. According to Fertility Matters Canada, 1 in 6 Nova Scotians will face fertility challenges. Nova Scotia is the first province to implement this rebate.
If you have any questions regarding the METC, the NSFSR, or the Assisted Human Reproduction Act, please contact the family team here at BOYNECLARE. We are very excited to help you in your family journey and to help you understand all the legislation surrounding surrogacy and gamete donation.
 Rebate for Fertility Treatments, Surrogacy-related Medical: March 30, 2022 https://novascotia.ca/news/release/?id=20220330002#:~:text=The%20Province%20will%20offer %20a,for%20surrogacy%2Drelated%20medical%20expenses.
 Tax Measures: Supplementary Information: April 4, 2022. https://budget.gc.ca/2022/report-rapport/tm-mf-en.html#a2_7