11 March 2003 External T.I. 2003-0006095 - 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.

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 the cost of bathroom renovations to allow a person who is permanently disabled access to a bathroom qualifies as a medical expense for the purpose of the medical expense tax credit.

Position: The cost of renovations to allow a disabled individual to be mobile or functional within a dwelling is a medical expense.

Reasons: 118.2(2)(l.2)

Bob Naufal, CMA
XXXXXXXXXX (613) 957-2744
2003-000609
March 11, 2003

Dear XXXXXXXXXX:

Re: Medical Expenses - Bathroom Renovations

We are writing in response to your letter dated February 23, 2003 wherein you asked us if the costs relating to bathroom renovations and related interest costs with respect to a loan that will be used to pay for the renovations qualify for the medical expense tax credit. You advised us that the renovations are required to allow your wife, who suffers from severe multiple sclerosis and is permanently disabled, access to the bathroom.

Our Comments

Written confirmation of the tax consequences that apply to a particular fact situation is given by this directorate only in the context of an advance ruling request submitted in the manner set out in Information Circular 70-6R5. Where the particular transactions are completed, the inquiry should be addressed to the local Tax Services Office. However, we are prepared to provide the following general 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. The credit applies to qualifying medical expenses, in excess of defined limits, incurred in any 12-month period ending in the taxation year. A person may claim his or her own medical expenses or those of a spouse or dependant.

Qualifying medical expenses include reasonable expenses relating to renovations or alterations to a dwelling of an individual who lacks normal physical development or has a severe and prolonged mobility impairment to enable the individual to gain access to, or to be mobile or functional within, the dwelling. Generally, an individual would be considered to have a severe mobility impairment where that individual's ability to perform the basic activities of daily living, such as walking or dressing oneself, is markedly restricted (e.g. the individual is confined to a wheelchair or has another immobilizing impairment). An impairment is considered to be "prolonged" if it has lasted, or may reasonably be expected to last, for a continuous period of at least 12 months.

Reasonable expenses relating to renovations or alterations of a dwelling would generally include, but not be limited to:

(a) the enlarging of halls and doorways to allow the individual to access various rooms of the dwelling,

(b) the lowering of bathroom cabinets to allow the individual to access them, and

(c) amounts paid for specific items such as a raised toilet, easy moving taps, a step-in safety shower and a roll door to facilitate a wheelchair.

In addition, qualifying medical expenses may also include a mechanical device or equipment designed to assist an individual to enter or leave a bathtub or shower or to get on or off a toilet, provided that the device or equipment is prescribed by a medical practitioner (usually a medical doctor).

If borrowed money is used solely for the purpose of making renovations or alterations to a dwelling and the costs related to the renovations or alterations qualify as a medical expense, we are prepared to treat the interest paid on the borrowed money as a medical expense.

We trust our comments will be of some assistance.

Yours truly,

Daryl Boychuk, LL.B
for Director
Business and Partnerships Division
Income Tax Rulings Directorate

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