28 January 2009 External T.I. 2009-0305671E5 - Board and lodging as medical expenses

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: i) Whether board and lodging allowed as medical expenses during the period of treatment. ii) Whether travel costs include visit home.

Position: i) No ii) No

Reasons: i) Costs for meals and accommodations may qualify as medical expenses en-route to obtain medical services. These costs are not travel expenses during the period the individual is receiving treatment. ii) Visits home are not to obtain medical services.

								2009-030567
XXXXXXXXXX 							Rob Ferrari
(613) 957-2138
January 28, 2009

Re: Medical Expense Tax Credit - Travelling

Dear XXXXXXXXXX :

This is in response to your letter of December 28, 2008 inquiring about travelling costs for purposes of the medical expense tax credit ("METC").

In the situation you described, your doctor referred you to a medical specialist in XXXXXXXXXX (the nearest city where the medical service is normally provided) for diagnostic and treatment of XXXXXXXXXX for a period of XXXXXXXXXX months. You incurred expenses to travel to and from XXXXXXXXXX for yourself and XXXXXXXXXX children to obtain these medical services. You stayed with your parent in XXXXXXXXXX and assisted with household expenses. During the treatment period, you made a visit home for a two week period during spring break and returned to XXXXXXXXXX for testing and the completion of your treatments. You have asked whether the costs for travel and the household expense are eligible medical expenses and whether a daily rate may be claimed for these expenses.

The situation outlined in your letter appears to relate to a factual one, involving a specific taxpayer. Should your situation involve a specific taxpayer and a completed transaction, you should submit all relevant facts and documentation to the appropriate Tax Services Office ("TSO") for their views. A list of TSOs is available on the "Contact Us" page of the CRA website. Although we cannot comment on your specific situation, we are prepared to provide the following general comments, which may be of assistance.

Our Comments:

Section 118.2 of the Income Tax Act (the "Act") provides rules for determining the amount that may be claimed, as a tax credit, in respect of medical expenses. Subsection 118.2(2) of the Act contains a list of expenditures that qualify as medical expenses.

An amount paid to a person engaged in the business of providing transportation services to transport an individual not less than 40 kilometres from the locality where the individual resides to a place where medical services are received may qualify as a medical expense under paragraph 118.2(2)(g) of the Act. Other reasonable travel expenses (including vehicle, food and lodging expenses) may qualify as medical expenses under paragraph 118.2(2)(h) of the Act if the individual travels not less than 80 kilometres from the locality where the individual dwells to a place where medical services are received. Transportation and travel expenses for an accompanying individual may qualify under paragraphs 118.2(2)(g) and (h) of the Act, but only if the patient has been certified by a medical practitioner as being incapable of travelling alone.

An individual is entitled to claim transportation and travel expenses under paragraphs 118.2(2)(g) and (h) provided the following requirements are met:

i) substantially equivalent medical services were not available in the individual's locality,

ii) a reasonably direct travelling route was taken by the individual, and

iii) the individual travelled to the particular place to obtain medical services for himself or herself and it is reasonable, having regard to the circumstances, for the individual to have travelled to that place for medical services.

Expenses meeting the criteria under paragraphs 118.2(2)(g) and (h) are generally allowed to the extent that they are reasonable and there is no reason to preclude their deduction (for example, if an insurance company were to reimburse the expenses).

The travel expenses incurred (including your meals and accommodations) for originally travelling to XXXXXXXXXX and the final return trip home appear to qualify as medical expenses provided the above conditions are met. However, travel expenses for your children, as well as your household expenses incurred during the period of treatment in XXXXXXXXXX , do not appear to qualify as medical expenses under subsection 118.2(2) of the Act. In addition, the costs incurred to return home to visit during the spring break would not appear to be for the purpose of obtaining medical services, in which case, the costs for this trip would not qualify as eligible medical expenses under subsection 118.2(2) of the Act.

A "simplified method" is available that provides rates for calculating eligible meal and vehicle expenses for the purpose of the METC. Further information on the simplified method is posted at: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/330/llwbltrvl-eng.html.

We trust that these comments will be of assistance.

Yours truly,

G. Moore
For Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch