3 March 2000 External T.I. 2000-0007885 - DIS. T.C.&MED EXP. FOR INSTITU. FEES

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: Whether a claim for a medical expense tax credit under paragraph 118.2(2)(e) of the Income Tax Act for a dependent child precludes the parent from also claiming the disability tax credit in respect of that child pursuant to subsection 118.3(2) of the Act.

Position: No.

Reasons: It is our view that an amount paid to a school, institution or other place for care or care and training would not be considered "remuneration" and thus would not be "remuneration for an attendant," even though the fees paid may be used by that school, institution or other place to pay the remuneration of its staff. Accordingly, the restriction in paragraph 118.3(2)(b), which denies a disability tax credit in respect of a dependent where an amount in respect of remuneration for an attendant or care in a nursing home is included in calculating a medical expense tax credit, would not apply.

XXXXXXXXXX J. Gibbons, CGA
2000-000788
Attention: XXXXXXXXXX

March 3, 2000

Dear XXXXXXXXXX:

We are replying to your letter of February 15, 2000, in which you requested our views whether a claim for medical expenses under paragraph 118.2(2)(e) of the Income Tax Act for a dependent child precludes the parent from also claiming the disability tax credit in respect of that child pursuant to subsection 118.3(2) of the Act. The dependent child suffers from severe learning disabilities and attention deficit hyperactivity disorder, and the child's doctor has prescribed that the child attend a special school.

As you know, paragraph 118.3(2)(b) denies a disability tax credit in respect of a dependent where an amount in respect of remuneration for an attendant or care in a nursing home is included in calculating a deduction under section 118.2 because of that dependent's mental or physical impairment. It is our view that an amount paid to a school, institution or other place for care or care and training would not be considered "remuneration" and thus would not be "remuneration for an attendant," even though the fees paid may be used by that school, institution or other place to pay the remuneration of its staff. Accordingly, a claim for a disability tax credit will not be denied solely on account of attendant care costs which are included in the fees paid to a school, institution or other place (other than a nursing home) for care or care and training and that were claimed by the taxpayer as a medical expense under paragraph 118.2(2)(e) of the Act for that year.

Yours truly,

John Oulton
for Director
Business and Publications Division
Income Tax Rulings Directorate

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