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:
Is funding received under two British Columbia programs for children with autism taxable?
Position:
No.
Reasons:
Although the amounts are social assistance, the payments are not made on the basis of a means, needs or income test.
XXXXXXXXXX T. Young, CA
2003-005461
February 9, 2004
Dear XXXXXXXXXX:
Re: Early Autism Intervention Funding
We are writing in response to your letter of November 12, 2003, to the Southern Interior B.C. Tax Services Office concerning Early Autism Intervention that you may receive on behalf of your child from the government of British Columbia. Your letter was forwarded to us for reply.
We understand that the funding will be received under either the Interim Early Intensive Intervention (IEII) program for children less than six years of age or under the Extended Autism Intervention (EAI) program for children aged six to eighteen. Accordingly, we reviewed the Guidelines, Policies and Procedures for both programs and the Parent Information Bulletin #1 for the EAI program, all published by the BC Ministry of Children and Family Development.
In order to qualify for funding under either program, your child must have been diagnosed with Autism Spectrum Disorder. Under both programs, the parents (or guardians) of the child receive a fixed amount of money per annum to be used to pay for a wide range of eligible expenses, which include therapy, counselling, tutoring, training and travel. The funds must be placed in a separate bank account in trust for the child. The parents are required to regularly account for the use of the funds and must return any unexpended funds after the ending of the agreement. Neither program is income-tested nor are the benefits affected by the financial means or needs of the families.
Paragraph 56(1)(u) of the Income Tax Act (the "Act") includes in income social assistance payments made on the basis of a means, needs or income test. In our view, while the funds received under the programs constitute social assistance, the payments are not made on the basis of a means, needs, or income test. Accordingly, they do not fall within paragraph 56(1)(u) of the Act. They also do not fall within any other provision of the Act. Therefore, any amounts received under the programs are not taxable.
We note that a number of the eligible expenses under the programs are also allowable medical expenses for income tax purposes. We would like to point out that, to the extent that these costs are paid for using IEII or EAI funds, you cannot claim them as medical expenses on the T1 Income Tax and Benefit Return.
We trust our comments will be of assistance to you.
Yours truly,
John Oulton, CA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Planning Branch
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