Why is refund lower when medical expense are claimed on lower earning spouse's return?

My 'threshold' for 2020 is the $2,397 maximum.
My wife's threshold is $438.36 as she only had some EI earnings for 2020.

When I enter an estimate of our combined medical expenses of $5000 the refund increases by:

$640.15 if claimed under MY return
$207.45 if claimed under my spouse's return.

Why is the increase lower if on hers?

I've read something about 'reaching zero tax liability' but I don't really understand.

I happened to owe tax this year, due to a period of self-employment so it seems we're eligible to get credit under me.

But in 2021 neither of us should owe tax at year end, so does this mean we would get no credit for medical expenses at all?

760

Returning Member

Mar 22, 2021 7:15:42 AM

I believe the medical on your spouse's return is being under utilized because her income is lower. It requires less of the medical expenses to bring her to a non taxable situation "reaching zero tax liability"

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Why is refund lower when medical expense are claimed on lower earning spouse's return?