2014-0553301E5 Medical expense - copy of medical records

Principal Issues: Is the fee paid to obtain a copy of medical records from a medical records management company an eligible medical expense for purposes of the medical expense tax credit (“METC”) under section 118.2 of the Income Tax Act (the “Act”)?

Position: No.

Reasons: The services provided are not medical expenses as described under subsection 118.2(2) of the Income Tax Act.

Author: Shea-Farrow, Nancy
Section: 118.2

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                                                                                                                                                          2014-055330
                                                                                                                                                          N. Shea-Farrow

February 11, 2015

Dear XXXXXXXXXX:

Re:   Technical Interpretation Request – Copy of Medical Records

We are writing in response to your email of October 23, 2014 on whether the fee paid to XXXXXXXXXX (the “Company”) to retrieve, scan, copy and mail out medical records is an eligible medical expense for purposes of the medical expense tax credit (“METC”) under section 118.2 of the Income Tax Act (the “Act”).

You state that you have power of attorney for your aunt.  Your aunt’s doctor retired and her new doctor requested a copy of her medical records.

Our Comments

This technical interpretation provides general comments about the provisions of the 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 and Technical Interpretations.

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) of the Act, or if the conditions 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. The Canada Revenue Agency’s general views regarding the METC are contained in  Income Tax Folio S1-F1-C1, Medical Expense Tax Credit (the “Folio”) which is on the CRA website at www.cra-arc.gc.ca.  Pursuant to paragraph 118.2(2)(a) of the Act, an amount paid by an individual to a medical practitioner, a dentist or a nurse (a “medical practitioner”) or to a public or  private licensed hospital for medical services is a qualifying medical expense for the METC. 

A medical practitioner must be authorized to practice their particular profession according to the laws of the jurisdiction in which the service is rendered, whereas a licensed private hospital must be licensed by the jurisdiction in which the hospital operates.  A list of authorized medical practitioners by province is listed on our website at http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/330/ampp-eng.html. A payment made to a corporation, partnership, society or association for medical services rendered by its employees or partners are eligible medical expenses only where the person who provided the service is a medical practitioner and the service provided was a medical service.

As explained in paragraph 1.26 of the Folio, a “medical service” is a diagnostic, therapeutic or rehabilitative service performed by a medical practitioner acting within the scope of his or her professional training.  The completion of health and disability forms by a medical practitioner is considered to be ancillary to the provision of medical services and the associated costs may also be claimed as an eligible medical expense under paragraph 118.2(2)(a).

However, it is our understanding that the Company to which you paid the fee is a document management company that specializes in medical records management for the health sector.  The services that were provided by the Company appear to be clerical in nature, are unlikely to be performed by a medical practitioner and in our view, are not medical services.  Therefore, the cost incurred for this service would not be a medical expense for the purpose of the METC.

We trust our comments will be of assistance.

Yours truly,

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

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