18 April 2001 External T.I. 2001-0079275 - DISABILITY TAX CREDIT

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 taxpayer may claim disability tax credit and also claim nursing home payments under 118.2(b.1) [instead of under (b) or (d)]?

Position:

No

Reasons:

Cannot claim both disability tc and nursing home payments. Can only claim disability with attendant care payments. Although nursing care may include some attendant care, it is not restricted to this type of care/service.

XXXXXXXXXX 	2001-007927
		Denise Dalphy, LL.B.
(613) 957-9231
April 18, 2001

Dear XXXXXXXXXX:

Re: Medical Expenses

We are writing in reply to your facsimile transmission of April 10, 2001 where you enquire whether your husband may claim the disability tax credit and amounts paid to a nursing home. In particular, you enquire whether your husband may claim the disability tax credit and up to $10,000 in "Nursing Home Charges".

Written confirmation of the consequences inherent in particular transactions are given by this directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R4. Where the particular transactions are partially completed or completed, the enquiry should be addressed to the relevant Tax Services Office. Notwithstanding the foregoing, we offer the following general comments.

The disability tax credit is available if all of the conditions in subsection 118.3(1) of the Income Tax Act (the "Act") are satisfied. One of the requirements, in paragraph 118.3(1)(c) of the Act, provides that the credit is only available if:

" (c) no amount in respect of remuneration for an attendant or care in a nursing home, in respect of the individual, is included in calculating a deduction under section 118.2 (otherwise than because of paragraph 118.2(2)(b.1)) for the year by the individual or by any other person,"

The payments that are described in paragraph 118.2(2)(b.1) of the Act (which do not prevent a disability tax credit claim) are, in general terms, only amounts that are paid as remuneration for "attendant care". Although the term "attendant care" is not as restrictive as the term "nursing care", payments to nursing homes are not solely payments for "attendant care". Payments to nursing homes also cover the expenses of the person for his or her room and board, as well as other services that cannot be described as "attendant care". Therefore, although payments to nursing homes may be fully deductible as medical expenses, they are not payments that are described in 118.2(2)(b.1) of the Act. We have enclosed a copy of Interpretation Bulletin IT-519R2, Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, for your information about the deductibility of payments to nursing homes. In particular, paragraphs 24, 27, and 29 to 31 of this IT Bulletin discuss the circumstances when payments to nursing homes are deductible. For these qualifying payments, there is no limit on the amount that may be considered to be "medical expenses".

Therefore, if payments that are made in a particular year to a nursing home are claimed as medical expenses for income tax purposes, the disability tax credit will not be available to a person for that year. If however, the person chooses, he or she can forego their claim for nursing home expenses for that year, and instead choose to claim the disability tax credit. It does not appear in this situation that any amounts were paid for "attendant care" (as distinct from the nursing home expenses), however, if such amounts were paid, the disability credit may be claimed at the same time.

The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R4, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Customs and Revenue Agency. Our practice is to make this specific disclaimer in all instances in which we provide an opinion.

Yours truly,

Steve Tevlin
for Director
Business and Partnerships Division
Income Tax Rulings Directorate

- 2 -