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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: Whether payments made to a place outside Canada that provides care and training for mentally handicapped individuals qualify as a medical expense.
Position: General comments provided.
Reasons: The determination is a question of fact.
Bob Naufal, CMA
XXXXXXXXXX (613) 957-2744
2002-017781
January 10, 2003
Dear XXXXXXXXXX:
We are writing in response to your letter dated December 1, 2002 wherein you requested our comments as to whether payments made to XXXXXXXXXX, for the care of your daughter qualify as medical expenses for the purpose of the medical expense tax credit. The XXXXXXXXXX provides XXXXXXXXXX for people with special needs. We acknowledge receipt of the information brochure about the XXXXXXXXXX and a letter from XXXXXXXXXX , a medical doctor, who states that your daughter is mentally handicapped and is unable to care for herself or manage her own affairs. She also states that your daughter suffers from Crohn's Disease and panic disorder.
Written confirmation of the tax implications that are applicable to the costs that you are proposing to incur may only be given by this Directorate on an application for an Advance Tax Ruling. However, we are prepared to provide the following general comments.
(a) Medical expense credit
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. The credit applies to qualifying medical expenses, in excess of defined limits, incurred in any 12-month period ending in the taxation year. Generally, an individual can claim medical expenses in respect of the individual and other specified persons, including a dependent child of the individual. A dependent child of an individual is a person that, at any time in the year, is dependent on the individual for support.
When an individual claims medical expenses in respect of a dependant (other than the individual's spouse) whose income is in excess of the basic personal amount ($7,634 for the 2002 taxation year), the amount of eligible medical expenses is reduced by 68% of the excess.
(b) Qualifying medical expenses
Qualifying medical expenses include an amount that is paid for the care or the care and training at a school, institution or other place, of an individual, who has been certified in writing by an appropriately qualified person to be a person who, by reason of a physical or mental handicap, requires the equipment, facilities or personnel specifically provided by that place. An "appropriately qualified person" includes a medical practitioner such as XXXXXXXXXX.
(c) Certification by XXXXXXXXXX
The certification by XXXXXXXXXX should provide details on the nature of your daughter's handicap and should explain why the equipment, facilities or trained professionals at the XXXXXXXXXX are required to provide her with the care and training that your daughter needs. In this respect, we would require more information on your daughter's mental condition. In addition, XXXXXXXXXX statement that it is her understanding that the XXXXXXXXXX has been able to provide the care, treatment and supervision your daughter requires would not, in itself, be sufficient. We would accept XXXXXXXXXX certification only if it was clear that she was fully informed as to the type of care provided by the XXXXXXXXXX and she was able to specify the reasons that your daughter requires the equipment, facilities or personnel provided by that place. Lastly, the Canada Customs and Revenue Agency must be satisfied that the equipment, facilities or personnel provided by a particular place meets this description. While a certification should be obtained prior to placing your daughter in the XXXXXXXXXX, we are prepared to accept a certification made after her placement if all the above-noted requirements are satisfied.
We trust our comments will be of some assistance. Please contact us if you have any questions concerning our response.
Yours truly,
Daryl Boychuk, LL.B
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
- 2 -
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2003
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2003
Email this Content