“It was a kick in the teeth we didn’t need”: the taxing process of being audited while caring for a child with a medical complexity

Photo credit: Numbers And Finance by Ken Teegardin

Anna Tosta remembers receiving the notice from the Canada Revenue Agency (CRA) after filing her taxes a few years ago.

“It was a summer when Amanda was having extraordinary issues. I was super busy at work, and I remember opening the envelope, probably thinking it was my refund.”

It wasn’t a refund. It was a notice that the CRA was reviewing Anna’s income tax return, specifically with respect to medical expenses.

The news was overwhelming. “I remember thinking how I am going to find the time to do this? And collect it all? And explain it all?”

Anna and her husband had more expenses than most families. Their daughter, Amanda, had complex medical needs. She was developmentally challenged, and had neurological and mobility issues. It was expensive to provide her the care she needed, and Anna’s tax return reflected this.

“It was a big year in terms of expenses,” says Anna. “It involved a new wheelchair for Amanda. It involved a new pump to be able to tube feed her. I think that was the year Amanda started using a special type of medicine that wasn’t typically given in pediatric doses. So I had to go to an apothecary to get this medicine in special formulations.”

All told, Anna claimed between $25,000 and $30,000 in medical expenses on her tax return. Now the CRA needed all the receipts to substantiate her claim — hundreds of receipts for everything from braces to medications.

Anna understood why such high medical expenses would prompt the CRA to review her return, but it was the last thing she wanted to think about.

“Who needs it? You’re trying to make sure your child survives one more day, and you have to find your receipts for CRA.”

Medical expenses under the microscope

It’s not unusual for families with medically fragile children to find their tax returns under review.

“I believe it’s common practice if you are claiming high medical expenses,” says Melissa D’Amora, a social worker at the Children’s Hospital of Eastern Ontario-Ottawa Children’s Treatment Centre (CHEO-OCTC).

In her work with the Navigator Program, which helps parents who care for a child with medical complexity, Melissa has seen how families struggle with the administrative burdens placed on them. These families’ finances are often precarious; tax time adds extra stress.

“I’ve had numerous families share that they haven’t filed their taxes or have chosen to let go of other additional sources of funding because they can’t keep up with all the paperwork,” Melissa says. “They prioritize what’s best for their situation financially and hope to complete the other paperwork as they can. This can become overwhelming and often times, things get lost in the stack of paper until they reach a point where they are in some sort of financial need or crisis.”

When Anna received the notice from the CRA, responding to the CRA would take time she didn’t have. “It was a kick in the teeth we didn’t need.”

Finding support

Anna enlisted the help of a friend at a large accounting firm, who re-checked Anna’s tax calculations, organized the receipts, and made a submission to CRA explaining the medical expenses. It was an expensive and time-consuming process. In the end, Anna’s original claim was substantiated.

While Anna was able to afford hiring an accountant, not all families can. “I do wonder how some families survive,” she says. “I don’t know how some people manage to keep their sanity, and in many cases do it with such grace. Grace under fire, that’s for sure.”

For families who can’t hire accountants, it can be difficult to figure out which medical expenses are deductible and how to properly complete and file their return.

“Imagine being pressured for time, completing taxes in 10- or 15-minute intervals because of all the family and medically-related disruptions, and trying to wrap your head around understanding and organizing everything,” says Melissa.

This is why the Navigator Program receives many inquiries from parents asking for support with filing their income taxes. “This is something we hope to offer support with in the future, by partnering with people that specialize in this” Melissa says.

Anna says something has to change. “There’s got to be a better way, respecting our tax system for sure, but cutting families some slack.”

She believes that peer support programs, like the Navigator Program, are one way of alleviating the stress families face. She also thinks that government institutions and benefit providers need to do a better job at providing user-friendly systems that do not add to families’ strain.

“There’s got to be a dynamic of cooperation. At the end of the day, we’re all part of the team that surrounds these kids, and if we don’t work as a team, it’s too hard.”

Families of children with medical complexity may find it helpful to review these financial tips for caregivers. They can also reach out to a social worker at CHEO-OCTC or the Navigator Program for guidance at navigator@cheo.on.ca.