2020-0842461E5 Egg freezing and storage

Principal Issues: Whether the costs paid for the egg freezing process, for the purpose of conceiving a child in the future by an individual who does not have a medical condition, are eligible medical expenses for the purposes of the medical expense tax credit.

Position: Yes.

Reasons: Legislation.

Author: Brennan, Christopher
Section: 118.2(1), 118.2(2)(a), 118.2(2)(n), 118.2(2)(o), 118.2(2.2)

XXXXXXXXXX                                                             2020-084246
                                                                                     Chris Brennan, CPA, CA
July 10, 2020

Dear XXXXXXXXXX:

Re: Egg freezing and storage

This is in reply to your letter dated March 2, 2020, requesting our views on whether the costs paid for the egg freezing process, for the purpose of conceiving a child in the future by an individual who does not have a medical condition, are eligible medical expenses for the purposes of the medical expense tax credit (METC).

During a phone call on March 2, 2020 (XXXXXXXXXX/Brennan) you indicated that you do not have a medical condition however you have undergone the egg freezing process to preserve your eggs with the intention that you may conceive a child in the future.

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 70-6R9, Advance Income Tax Rulings and Technical Interpretations.

Many costs related to the use of reproductive technologies may be eligible medical expenses. For example, amounts paid to a medical practitioner or a public or private hospital to conceive a child may be eligible under paragraph 118.2(2)(a) of the Act. Amounts paid for prescription drugs are generally eligible medical expenses under paragraph 118.2(2)(n) of the Act, including the cost of prescribed fertility medication. Certain lab or diagnostic procedures involved with a reproductive technology process (such as artificial insemination, or in-vitro fertilization (IVF)) may be eligible medical expenses under paragraph 118.2(2)(o) of the Act.

Based on the information gathered from various sources, the egg freezing and storage process is a method of fertility preservation. The procedures within the egg freezing process are identical to the initial steps within the IVF process, with the exception that the eggs are frozen prior to being fertilized. The egg freezing and storage process may include costs (not an all inclusive list) such as:

*     appointments with medical practitioners (including initial fertility consultation and monitoring);
*     lab and diagnostic tests (including blood work, and ultrasounds);
*     prescription fertility-related drugs;
*     egg retrieval procedure;
*     anaesthetist fees; and
*     egg freezing and storage.

The cost of the egg freezing and storage process, for a patient (as defined for the purpose of the METC) when medically indicated (such as, for the medical condition of infertility or when medically advisable because of impeding medical treatments that are likely to have a direct significant negative effect on reproduction functions) would likely qualify as eligible medical expenses if the requirements of paragraphs 118.2(2)(a), 118.2(2)(n), or 118.2(2)(o) of the Act are otherwise met.

Subsection 118.2(2.2) of the Act allows individuals to claim expenses paid for reproductive technologies even where such treatment is not medically indicated because of the medical condition of infertility. This means that individuals who are patients and who require medical intervention for the purpose of conceiving a child will be eligible to claim the same expenses that would generally only be eligible for individuals who require the reproductive technologies on account of medical infertility. Based on the information available, the egg freezing and storage process allows an individual to preserve their eggs for the purpose of conceiving a child in the future by undergoing the remaining steps of the IVF process. Therefore, it is our view that the costs of the egg freezing and storage process, paid for the medical expenses of the individual, the individual’s spouse or common-law partner, or a dependant of the individual, would be deemed to be an eligible medical expense for purposes of section 118.2 of the Act.

We trust our comments will be of assistance to you.

Yours truly,

Lita Krantz, CPA, CA
Manager, Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch

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