3 May 2004 External T.I. 2004-0063331E5 - Medical expenses - dependent

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:	Can an individual claim a medical expense of a patient who is
		the mother of the taxpayer's deceased spouse?

Position: Yes, provided that the patient is a dependent of the

individual.

Reasons: Extension of administrative practice as described in Appendix A of IT-513R that where a marriage has been dissolved by death, the family relationships created by the marriage continue to exist.

Bob Naufal, CMA
XXXXXXXXXX (613) 957-2744
2004-006333
May 3, 2004

Dear XXXXXXXXXX:

Re: Medical expenses of a dependant

We are writing in response to your letter dated February 19, 2004, where you asked us if an amount paid by an individual for medical expenses in respect of the mother of the individual's deceased spouse would qualify for the medical expense tax credit under section 118.2 of the Income Tax Act (the "Act").

Our Comments

Section 118.2 of the Act provides the 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 parent of the individual. A dependent parent of an individual includes the parent of the individual's spouse who, at any time in the year, is dependent on the individual for support. Generally, a person will be dependent for support on an individual if the individual has actually supplied necessary maintenance, or the necessities of life, to the person on a regular and consistent basis.

Under current income tax law, 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 ($7,756 for the 2003 taxation year), the amount of eligible medical expenses is reduced by 68% of the excess. The Federal Budget tabled on March 23, 2004 (the "Budget") has introduced measures to allow individuals to claim more of the medical expenses that they incur on behalf of dependants. Under the provisions of the draft legislation introduced in the Budget, individuals will be able to claim qualifying medical expenses paid on behalf of dependants that exceed 3% of the dependant's net income, up to a maximum of $5,000.

For purposes of the medical expense tax credit, it is our general view that where two persons have been connected by marriage, it is considered that this connection continues to exist when the marriage has been dissolved by death. Accordingly, an individual may claim medical expenses in respect of his or her deceased spouse's mother or father, subject to the criteria discussed above.

The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R5, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Revenue Agency. Our practice is to make this disclaimer in all instances in which we provide an opinion.

We trust our comments will be of some assistance.

Yours truly,

Wayne Antle, CGA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate