4 June 2004 Internal T.I. 2004-0068651I7 - Prescribed medical devices

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: Does the cost of a television set that contains a closed captioning chip qualify as a medical expense?

Position: Only the cost equivalent of the caption decoder chip will qualify as a medical expense provided all other conditions of paragraph 118.2(2)(m) are met.

Reasons: A television set is not included in the list of prescribed medical devices in regulation 5700.

 		June 4, 2004

	Winnipeg TSO 21	HEADQUARTERS
	Phil Halprin	Bob Naufal, CMA
	Large Case Files	(613) 957-2744

2004-006865

Prescribed Medical Devices and Equipment

We are writing in response to your email of March 25, 2004, wherein you asked us if the cost of a television set that includes a closed caption chip would qualify as a medical expense under paragraph 118.2(2)(m) of the Income Tax Act (the "Act").

Briefly, closed captioning translates the audio portion of a television program into subtitles, commonly called captions. These captions allow hearing-impaired viewers to read what they are unable to hear. Captions normally appear at the bottom of a television screen as white letters on a black background. To view closed captioning, it is generally required that the part of a television broadcast signal commonly known as "line 21" be decoded. In this regard, a television must be equipped with a caption decoder chip or have an external decoder attached to it. It is our understanding that, since 1995, television sets with screens larger than 14 inches must contain a caption decoder chip.

Our Comments

Subsection 118.2(2) of the Act provides a list of expenditures that qualify as medical expenses. Under paragraph 118.2(2)(m) of the Act, a payment in respect of prescribed medical devices and equipment may qualify as a medical expense if certain conditions are met. Generally, to qualify, the device or equipment must be prescribed by a medical practitioner and be included in the list of qualifying medical devices or equipment described in section 5700 of the Income Tax Regulations (the "Regulations"). In this regard, paragraph 5700(q) of the Regulations describes a "device to decode special television signals to permit the script of a program to be visually displayed".

It is our view that paragraph 5700(q) of the Regulations would only apply to the caption decoder chip or external decoder, as the case may be. Accordingly, only the cost associated with these items would qualify as a medical expense under paragraph 118.2(2)(m) of the Act. Where the caption decoder chip is embedded in the television set, we would accept the cost equivalent value of the chip as a qualifying medical expense provided all other conditions of paragraph 118.2(2)(m) of the Act are met.

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.

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