Compliance
Maximizing Credits While Avoiding Overlaps: HATC vs METC Rules for 2026
New Budget 2025 rules prohibit claiming the same expense under both the Home Accessibility Tax Credit and Medical Expense Tax Credit starting with the 2026 tax year—understand what's eligible and optimize your claims.
By NomadicTax Research Team • 5-8 min read • September 14, 2026
## What Changed as of Taxation Year 2026
Budget 2025 introduced a rule that **expenses claimed under the Medical Expense Tax Credit (METC)** cannot also be claimed under the **Home Accessibility Tax Credit (HATC)**. This takes effect for 2026 and subsequent taxation years.([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2025-cra-information-select-measures.html?utm_source=openai))
## Key Differences: METC vs HATC
| Feature | METC | HATC |
|---|---|---|
| Purpose | Medical or disability-related expenses beyond threshold | Home alterations to improve access, mobility, or safety in dwelling |
| Claiming | Medical expenses over lesser of 3% of net income or fixed amount | Non-refundable credit based on cost of eligible renovations or alterations |
Before 2026, some expenses (e.g., installing ramps, walk-in bathtubs) could be claimed under both credits when eligible under both definitions.
## New Rules in Practice
- Any given eligible expense must be exclusively claimed under METC or HATC—not both. You must **choose which credit best maximizes your tax benefit**.([canada.ca](https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2025-cra-information-select-measures.html?utm_source=openai))
- Claiming expense under METC might mean a higher threshold to cross, but METC uses higher-rate deduction for medical expenses vs. what HATC provides in “credit” value. Evaluate accordingly.
## How to Decide What's Best
1. **Calculate net income and medical-expense thresholds**: if your qualifying expenses are just above the METC threshold, using METC might get you more return.
2. **Estimate credit value under HATC**: If renovating extensively (ramps, rails, bathroom adjustments), HATC may offer higher credit dollar-for-dollar benefits despite lower rate.
3. **Keep detailed receipts** and understand classification of each expense.
## Example
> Maria incurs $10,000 in eligible home alterations (ramps, accessible bathroom). Her net income is $60,000. Under METC, only expenses beyond 3% (i.e. expenses above $1,800) are creditable. So first $1,800 gets no benefit, and the rest is at METC rate (non-refundable at personal rate). Under HATC, often entire $10,000 (less any amount claimed elsewhere) qualifies for credit of specific rate. If her medical expenses beyond threshold are modest vs alterations, HATC might offer more.
## Action Steps
- For 2026 return: **list all potential METC and HATC expenses, do both calculations**, and choose which offers greater tax relief.
- Consult CRA and/or tax professionals when ambiguous classification arises.
- Save all receipts and documentation—CRA may ask to see eligibility criteria met.
- Monitor any provincial supplements—some provinces provide additional credits/benefits.
Understanding the updated rules around METC and HATC is essential to maximize savings and avoid audit risk. Thoughtful planning for your 2026 tax return can ensure you claim the greatest benefit while staying compliant.