2014-0529901E5 MEDICAL EXPENSE - VASECTOMY REVERSAL

Principal Issues: Whether a vasectomy reversal would qualify as a medical expense for purposes of the METC?

Position: Likely yes, provided the requirements under paragraph 118.2(2)(a) are met.

Reasons: Generally, an amount paid to a medical practitioner for surgery that is not provided purely for cosmetic purposes qualifies as a medical expense.

Author: Lew, Janet
Section: 118.2(2)(a); 118.2(2)(o); 118.2(2.1)

XXXXXXXXXX
2014-052990
Janet Lew, CPA, CA
(613) 957-2135

September 11, 2014

Dear XXXXXXXXXX:

Re: Medical Expense – Vasectomy Reversal

This letter is in response to your April 30, 2014 and May 2, 2014 emails, in which you requested our comments regarding whether a vasectomy reversal would qualify as a medical expense for purposes of the medical expense tax credit (“METC”). In your view, a vasectomy reversal should qualify as a medical expense since the elective surgery is a means by which your client can bear children and since other fertility procedures are allowed as medical expenses.

OUR COMMENTS

This technical interpretation provides general comments about the provisions of the Income Tax Act (“Act”) and related legislation (where referenced). It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R6, “Advance Income Tax Rulings.”

Medical expenses which are eligible for the METC are limited to those described in subsection 118.2(2) of the Act. If a particular expenditure is not described as an eligible medical expense in subsection 118.2(2), or if the requirements under which the expenditure would qualify are not met, the expenditure does not qualify for purposes of the METC, even though the expenditure may have been incurred for medical reasons.

Generally, paragraph 118.2(2)(a) of the Act provides that an individual may claim as medical expenses, amounts paid to a medical practitioner, dentist, or nurse or a public or licensed private hospital for medical services. A medical practitioner must be authorized to practise his or her particular profession according to the laws of the jurisdiction in which the service is rendered, whereas a licensed private hospital must be licensed under the laws of the jurisdiction in which the hospital operates.

A medical service is a diagnostic, therapeutic, or rehabilitative service provided by a medical practitioner acting within the scope of his or her professional training. Generally, an amount paid to a medical practitioner is considered an eligible medical expense when it is paid for a service or procedure that relates to an existing medical condition or illness. In our view, the fact that a service or procedure is elective would not disqualify it from being considered a medical service. However, if the service or procedure is provided purely for cosmetic purposes, amounts paid, including any related expenses, would not qualify as medical expenses pursuant to subsection 118.2(2.1) of the Act, unless necessary for medical or reconstructive purposes.

Whether an amount qualifies as a medical expense is a question of fact. In our view, an amount paid for a medical service that relates to an existing medical condition or illness, for example, infertility, would likely qualify as a medical expense, provided the other requirements of paragraph 118.2(2)(a) of the Act were met.

Additional information on medical expenses can be found in the Income Tax Folio S1-F1-C1, “Medical Expense Tax Credit,” and Guide RC4064, “Medical and Disability-Related Information,” both of which are available on the CRA website at www.cra-arc.gc.ca.

We trust our comments will be of assistance.

Yours truly,

Pamela Burnley, CPA, CA
Manager
Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate

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