2017-0696851E5 Medical expense tax credit

Principal Issues: Is the cost of prenatal classes an eligible medical expense for the purpose of the medical expense tax credit?

Position: Question of fact, but likely no.

Reasons: The amounts paid for such classes are not medical services as the classes do not appear to be diagnostic, therapeutic or rehabilitative services. They are also not for laboratory, radiological or other diagnostic procedures or services together with necessary interpretations.

Author: Shea-Farrow, Nancy
Section: 118.2

XXXXXXXXXX                                                                                                        2017-069685
                                                                                                                                N. Shea-Farrow
February 21, 2018

Dear XXXXXXXXXX:

Re: Prenatal classes and the medical expense tax credit

We are responding to your email of April 3, 2017, concerning whether the cost of the services provided by XXXXXXXXXX are eligible medical expenses for the purpose of the medical expense tax credit (METC).

According to your website it appears that XXXXXXXXXX are registered nurses that provide prenatal classes to prospective parents.

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 70-6R7, 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. This is the case 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”).

Paragraph 118.2(2)(a) of the Act allows, as an eligible medical expense of an individual, an amount paid to a medical practitioner, dentist or nurse or a public or licensed private hospital for medical or dental services provided to a patient.  For the purpose of the METC, the patient must be the individual, the individual’s spouse or common-law partner, or certain dependants of the individual.

As explained in paragraph 1.26 of the Folio, medical services are diagnostic, therapeutic or rehabilitative services that are performed by a medical practitioner acting within the scope of his or her professional training.  Generally, payments to medical practitioners are considered eligible medical expenses when they are paid for medical services or procedures that relate to existing illnesses or conditions of the patient.

According to your email, “Childbirth education programs dramatically reduce medical intervention at birth.”  It appears that each of you provide prenatal classes to prospective parents for general educational purposes to help prospective parents make informed decisions that will affect the health of the prospective mother and child. The services provided seem to be educational in nature and the relationship between each of you with a prospective parent enrolling in one of the prenatal classes seems to be more of a teacher/student relationship rather than that of medical practitioner/patient. As mentioned, services provided to a patient must be diagnostic, therapeutic or rehabilitative services in order to qualify under 118.2(2)(a) of the Act. In other words, the services provided by the medical practitioner who is acting within the scope of his or her professional training must assist the practitioner in making a diagnosis or formulating a course of treatment for a patient.  In our view, although it is a question of fact, the prenatal classes are not medical services that are provided to a patient for the purpose of the METC.

Pursuant to paragraph 118.2(2)(o) of the Act, eligible medical expenses also include amounts paid:

*     for laboratory, radiological or other diagnostic procedures or services together with necessary interpretations;
*     for maintaining health, preventing disease or assisting in the diagnosis or treatment of any injury, illness or disability;
*     for the patient; and
*     as prescribed by a medical practitioner.

The expenditures must satisfy all four conditions in order to be eligible medical expenses under paragraph 118.2(2)(o) of the Act. “Other diagnostic procedures or services” is generally limited to the same class as laboratory or radiological services. Providing prenatal classes to prospective parents is not such a procedure or service.

The prenatal classes do not appear to fit within paragraphs 118.2(2)(a) or (o) of the Act, nor any other paragraph of the Act listing expenses that qualify for the METC, and it is therefore our view that the payment for prenatal classes is not an eligible medical expense for the purpose of the METC.

We trust our comments will be of assistance.

Yours truly,

Lita Krantz, CPA, CA
Manager - Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate

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