2021-0879941E5 METC – Cost of a nebulizer

Principal Issues: Whether the cost of a nebulizer or a replacement part qualify as eligible medical expenses for the purposes of the medical expense tax credit.

Position: No.

Reasons: The requirements in paragraph 118.2(2)(m) of the Act and paragraph (c) of section 5700 of the Regulations have not been met.

Author: Underhill, Cynthia
Section: subsections 118.2(2); 118.4(2); subparagraph 118.2(2)(m), and IT Regulation 5700.

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                                                                                                                                                                                                                                                                                          2021-087994
                                                                                                                                                                                                                                                                                          C. Underhill

September 8, 2021

Dear XXXXXXXXXX:

Re: Medical expenses – Nebulizer

We are writing in response to your correspondence received on February 4, 2021, asking if the cost of a home nebulizer, including a replacement part such as a nebulizer cup, is an eligible medical expense for the purposes of the medical expense tax credit (METC). The nebulizer has been prescribed by a doctor to administer prescribed medication for an individual diagnosed with cystic fibrosis.

It is our understanding that a nebulizer is a device that is used to turn liquid medicine into a very fine mist that a person can inhale. It can be used with many different types of medication to administer the medication directly and quickly to the lungs. Nebulizers are used in a wide variety of settings such as in a hospital, long term care, or in a home setting, and are utilized for a number of different ailments and conditions. A nebulizer can be purchased with or without a prescription, but the medication used with a nebulizer is only purchased with a prescription. A nebulizer may be used to treat both severe chronic respiratory ailments and non-chronic respiratory ailments.

Our comments:

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 70-6R11, Advance Income Tax Rulings and Technical Interpretations.

The Canada Revenue Agency’s (CRA) general views regarding the METC are contained in Income Tax Folio S1-F1-C1, Medical Expense Tax Credit (the Folio). You can find a Folio online by going to Canada.ca and typing the name of the Folio into the search toolbar.

Medical expenses 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.

Under paragraph 118.2(2)(m) of the Act, an amount paid for a device or equipment may qualify as an eligible medical expense when certain conditions are met. As explained in in paragraph 1.118 of the Folio, generally to qualify, the device or equipment must be prescribed by a medical practitioner, must be included in the list of qualifying devices or equipment described in section 5700 of the Income Tax Regulations (the Regulations) and must meet such conditions as are prescribed by the Regulations as to its use or the reason for its acquisition.

The devices and equipment are specified in the various paragraphs of section 5700 of the Regulations, in particular paragraph (c) of section 5700 of the Regulations states:

“c) A device or equipment, including a replacement part, designed exclusively for use by an individual suffering from a severe chronic respiratory ailment or a severe chronic immune system disregulation . . .”

It is a question of fact whether a nebulizer is a device designed exclusively for use by an individual suffering from a severe chronic respiratory ailment or a severe chronic immune system disregulation. The word “exclusively” in paragraph (c) of section 5700 of the Regulations is to strictly limit the devices that are deductible under the Act. Paragraph (c) of section 5700 of the Regulations only allows devices that are designed exclusively for use by a patient that is suffering from a severe chronic respiratory ailment or a severe chronic immune system disregulation. A nebulizer does not fall under the ambit of paragraph (c) of section 5700 of the Regulations because a nebulizer may be used to treat both severe chronic respiratory ailments and non-chronic respiratory ailments.

Therefore, it is our view that a nebulizer system, including a replacement part, does not qualify for the METC because this device does not meet all of the conditions described in paragraph 118.2(2)(m) and does not satisfy the additional requirements in paragraph (c) of section 5700 of the Regulations, as it is not designed exclusively for use by a patient that is suffering from a severe chronic respiratory ailment or a severe chronic immune system disregulation.

We trust that these 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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