Gluten-free receipts and taxes

While it's good to have the celiac tax benefit, most people can't avail it because of legal complexities.

Canada is one of the best places to live in, if you live with celiac disease. There are many ways that we are accommodated here, and tax-credit is one of the most highlighted. It was the second thing that the gastroenterologist mentioned, the first being the gluten-free diet. Some of the other ways I feel welcomed here are: the availability of gluten-free(GF) foods, the strict food-labelling laws for allergens, the awareness among people about celiac disease and food allergies, and the relative seriousness among restaurants about allergens. While most pros about living here are learned overtime after diagnosis, the tax-credit is told to the patient immediately. In some ways, it sounds like a little relief in that conversation with the doctor.

So, yes, I can get a tax-credit that will compensate for the extra I have to spend for GF food. There are caveats though, as with anything that saves money. In theory, any price difference between a normal and GF version of the product should be reduced from my tax. In practice though:

It’s funny the only thing that seemed like a silver lining, fades into the shadow overtime. There are other things to brighten the silver lining, but this post is about the tax-credit. Other than getting the doctor’s letter, the amount of consistent work required to benefit from the tax-credit is humongous. Before I dive deeper, let me list all requirements of a year-long undertaking to claim the tax-credit:

1. Receipts for GF purchases

2. Unclear food items

3. Incremental cost

4. Product summaries

5. Eating-out, what?

6. Not all GF food

7. Minimum spending

1. Receipts for GF purchases

For starters, as a celiac, I have to keep receipts for all GF purchases for the whole year, online or offline. On 90% of the grocery store visits, I do buy something GF. From toothpaste to olive oil, to peanut butter, I can’t take chances with anything. I do my grocery runs at multiple stores, on average let’s say I have 2 receipts every week with GF foods. This yields 104 receipts for the year. These receipts are printed with the ink that fades away if left out in the open. I have to scan them the same weekend, else it can fade away quickly.

It sounds easy enough, once a week, eh? Let me ask you this: what is the thing you decided to do weekly and you could with no troubles. It can be as simple as calling your family. Doing something consistently without fail is incredibly hard. If you haven’t tried it, you should try, you’ll be surprised. We shouldn’t forget that we are busy people, sometimes we are helping a friend move or sometimes we are sick. Many people with celiac disease don’t find that effort worth it.

It sounds fair as we are the only ones who know when we bought what, right? I agree. I have the receipts, so I am responsible for them. Keep reading, we need a bit more context as to why it’s probably not worth the effort.

2. Unclear food items

The first nuance is about the foods that don’t say gluten-free on their packaging but are safe to consume as per their label (ingredients, contains, may contain and made in facility warnings). A good example is yoghurt; most brands are safe as per their labelling, but I still use a brand that says “no gluten” on its packaging. As it doesn’t say ‘gluten-free’ or ‘certified gluten-free’, can I add it in my tax credit? It can be tricky to know if we need to mark such products.

3. Incremental cost

The next nuance of the legality is the full cost of a GF product cannot be claimed as tax-credit. Only the difference in the cost of the GF and non-GF version of the product can be claimed. To illustrate: if GF bread costs $7.99 and non-GF bread costs $3.99, only $4.00 (7.99 - 3.99) can be claimed as tax-credit.

Considering that everything I buy is GF, it's cumbersome to remember the cost difference for each packaged food item. It’s not as if my receipt tells me the cost of non-GF items too. Secondly, finding the cost of a ‘similar’ gluten-product can be extra work because it could be in a different aisle all together. (not so bad for walking 10,000 steps, I guess)

Quite often, it can be hard to identify a ‘similar’ product, especially if a GF food doesn’t have a similar product with gluten. For example, tapioca flour is always GF, I wouldn’t buy it if I didn’t have to avoid gluten. How can I find this incremental cost? This is important because CRA wants us to keep a documentation as follows:

An example from CRA’s website they use to illustrate

4. Product summaries

If someone is not tired of doing all that already, they can keep a documentation similar to above image. As per the screenshot, it says to create a product summary with pricing for the whole year. This is relatively easy if you’re able to keep the receipts and already making a spreadsheet of prices differences.

One thing to note here is that after staying on top of the spreadsheet, I’ll need to calculate average pricing for each product throughout the year. Easy if you’re an excel wizard… really, most of us aren’t.

I’ll also bring attention to the counting difficulties here. It’s best to illustrate this with a real example: I get GF bread from Costco. The GF bread is a pack of two loaves, while the normal bread is pack of three loaves. I wonder whether to count per loaf price or per package. Curious to know what you do, please share your thoughts in comments.

So, it’s not as straight-forward as one may think.

5. Eating out, what?

If you happen to be a social person and figure out where and what you can eat out with friends. This one is for you. Usually restaurants charge a little extra for their effort to keep a meal GF. But that cannot be redeemed. On top of that, it’s usually the more expensive restaurants that take care of cross-contamination. So yes, it’s a big part of monthly spending.

It’s quite clear that the regulations consider eating out as luxury and not something all of us do. As anyone with celiac would know, social life suffers the most. I have written a few times about it, but this aspect of celiac disease can always be discussed more. So, I’ll move on for now.

6. Not all GF food

This caveat is probably the hardest to deal with. As per the regulation, we can only claim the food that people with celiac diagnoses consume in a household. There are those of us who keep the whole kitchen GF for safety of a kid or someone we care about and those of us who have a shared gluten/GF kitchen. Both come with challenges.

If a kitchen is completely GF, it means that everyone is eating GF as being considerate to their family member(s) who live with celiac disease. If it is a shared kitchen, there will still be some of the food is made to be GF to be shared among the co-habitants like on dinner parties etc. Either way, only the part of the pie eaten by celiac(s) is eligible for the tax-credit.

The CRA’s attitude towards this can be summed up as: “not my problem”. Good luck tracking who ate how much while enjoying dinners together. The thing here is that tracking this is hard for CRA too.

7. Minimum spending

Let’s say someone has done all of that and calculated the amount to be, say, $2200. You would think “Oh great! They can save $2200 in taxes”. Well, not so soon. They must subtract 3% of the income or $2635 (whichever is lower) from that amount. So if 3% of their gross income is higher than $2200, they get $0 tax credit.

Considering the median income of a Canadian as per StatsCan: $68,400, 3% is $2052. So, in this case, a median income earner would get a mere $148 (2200 - 2052). The worst part is that I can only learn how much I save after doing all the work.

If someone is in a situation, where every penny matters they’ll do the work to save it. For the rest of us, it may be better to just worry about costs when we are spending.

Is it fair?

Grocery shopping is a task by itself, add these numerous little things on top of that, one can only imagine how hard it can be. We have to spend, at least 3% of our income or $2635, not on gluten-free food, but higher than the gluten food to get any benefit from this. I admit that you can club it with other medical expenses that qualify for tax credits. The bottomline is that we have to spend way more, put a lot of effort into keeping records and at the end realize that the benefit most likely wasn’t worth the effort it needed.

The answer to “is it fair?”, obviously depends on who you ask. In my opinion, either have a tax-credit for us that is easy to avail or don’t. The current system has made it so hard to avail, that almost nobody is able to. The benefit is a namesake.