4 December 2009 Internal T.I. 2009-0342421I7 - medical expense kidney dialysis

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: Whether the cost of storage space (climate controlled) for boxes of supplies for a home dialysis machine would qualify a medical expense for purposes of the medical expense tax credit?

Position: Yes

Reasons: The broad wording of paragraph 118.2(2)(i) of the Act

December 4, 2009

Medical Expense Tax Credit - Rental Costs for Storage of Artificial Kidney Machine

This is in response to your memorandum of September 10, 2009, regarding whether the cost of renting storage space for 30 boxes of supplies for a home dialysis machine would qualify as medical expenses for purposes of the medical expense tax credit. The supplies have to be stored in a climate controlled location.

In the case of a home kidney dialysis machine, paragraph 118.2(2)(i) of the Income Tax Act provides as follows:

"i) [Various items - artificial limb, wheelchair, etc.] - for, or in respect of, an artificial limb, an iron lung, a rocking bed for poliomyelitis victims, a wheel chair, crutches, a spinal brace, a brace for a limb, an iliostomy or colostomy pad, a truss for hernia, an artificial eye, a laryngeal speaking aid, an aid to hearing, an artificial kidney machine, phototherapy equipment for the treatment of psoriasis or other skin disorders, or an oxygen concentrator, for the patient;"

Qualifying medical expenses relating to an 'artificial kidney machine' include the costs of alterations to a home or the upgrading of the home's existing electrical or plumbing systems, provided that these costs are reasonable in the circumstances and are necessary for the installation of the machine. When an artificial kidney machine is installed at the individual's residence, the following costs, to the extent that they are reasonable, may also be included as qualifying medical expenses under paragraph 118.2(2)(i):

(a) repairs, maintenance, and supplies for the machine;
(b) water and electricity to operate the machine; and
(c) the costs of housing the machine (that is, municipal taxes, insurance, heating, lighting, and maintenance and repairs, but not including capital cost allowance or mortgage interest) or the portion of rent that is attributable to the room where the machine is kept. In determining the portion of rent that qualifies as a medical expense, the amount must be based on actual rent paid and not on the rental value of the room in a home that is owned.

Given our broad interpretation, it is our view that the taxpayer's expenses in this case would qualify as medical expenses under paragraph 118.2(2) of the Income Tax Act. The cost of renting storage space to store 30 boxes of supplies would likely, in our view, qualify as a medical expense for purposes of the medical expense tax credit, if the cost is reasonable under the circumstances. The amount must be based on actual rent paid.

We trust that these comments will be of assistance.

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