Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Whether travel and associated costs incurred from home to hospitals for the medical care of a child would be an eligible medical expense for purposes of the medical expense tax credit?
Position: Question of fact
Author: Robertson, George
Section: 118.2(2)(g) & (h)
George A Robertson, CPA CMA
August 24, 2015
This is in response to your letter dated April 24, 2015, enquiring whether travel and other travel expenses between your home and hospitals for the care of your newborn child are eligible medical expenses for purposes of the medical expense tax credit. We also acknowledge our telephone conversation of May 15, 2015 (XXXXXXXXXX/Robertson).
It is our understanding that your newborn child was in several different hospitals most of the first XXXXXXXXXX months of his life for XXXXXXXXXX medical issues. You incurred travel and accommodation [XXXXXXXXXX] expenses when your child was in each of the hospitals.
This technical interpretation provides general comments about the provisions of the Income Tax Act (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.
Subsection 118.2(2) of the Act describes the types of medical expenses that are eligible for the medical expense tax credit. If a particular expenditure is not described in subsection 118.2(2), or if the requirements under which the expenditure would qualify are not met, the expenditure is not eligible for the medical expense tax credit, even though the expenditure may have been incurred for medical reasons. The Canada Revenue Agency’s general views regarding the medical expense tax credit can be found in Income Tax Folio S1-F1-C1: Medical Expense Tax Credit (the “Folio”), at http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s1/f1/s1-f1-c1-eng.html.Certain transportation and travel expenses that are eligible expenses for the purpose of the medical expense tax credit are described in paragraphs 118.2(2)(g) and (h) of the Act.
Specifically, an amount paid to a person engaged in the business of providing transportation services to transport a patient at least 40 kilometres, from the locality where the patient lives to a place where medical services are normally provided, may qualify as a medical expense under paragraph 118.2(2)(g) of the Act. If a person engaged in the business of providing transportation services is not readily available, a claim can be made for reasonable expenses incurred for operating a personal vehicle to transport the patient.
In addition, if the patient travels to obtain medical services in a place that is at least 80 kilometres from the locality where the patient lives, other reasonable travel expenses (for example, accommodation, meals and parking) may also qualify as a medical expense.
An individual is entitled to claim transportation and other travel expenses only if the following additional requirements are met:
(i) substantially equivalent medical services are not available in the patient’s locality;
(ii) the patient takes a reasonably direct travel route, having regard to the circumstances; and
(iii) the patient travels to that place to obtain medical services for himself or herself and it is reasonable, having regard to the circumstances, for the patient to travel to that place to obtain those services.
If transportation or other reasonable travel expenses incurred in respect of a patient’s travel to obtain medical services can be claimed under paragraphs 118.2(2)(g) or (h), the same kind of expenses paid for transportation and travel for one individual who accompanies the patient may also be claimed as an eligible medical expense. For the expenses paid for the accompanying individual to be eligible, a medical practitioner must certify in writing that the patient is incapable of travelling without the assistance of an attendant (which is usually the case when the patient is a minor). The Folio contains more information about eligible travel expenses in paragraphs 1.65 to 1.70 and 1.72.
Whether all of the requirements are met is a question of fact. Given the limited information provided, it appears that the cost of the stay at the XXXXXXXXXX and related meals could qualify as a medical expense under paragraph 118.2(2)(h) based on one parent’s status as your baby’s attendant. Based on the information you sent to us, it appears that there may have been some commuting between your home and the hospitals. Because travel and transportation expenses are limited to the patient and one attendant, if one parent stayed near the hospital (e.g., at XXXXXXXXXX) as your baby’s attendant while your baby was in the hospital, the expenses of the parent who travelled back and forth between the home and the hospital during that time would not be eligible.
You can also find more detailed information, including some examples, about travel expenses for the purpose of the medical expense tax credit in RC4064, Medical and Disability-Related Information, available at www.cra-arc.gc.ca/E/pub/tg/rc4064/README.html .
We trust our comments will be of assistance.
Pamela Burnley, CPA, CA
Manager, Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate
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