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: Whether the cost of a service contract (warranty) on a hearing aid qualifies as a medical expense for purposes of the medical expense tax credit.
Position: Likely yes
Reasons: The wording in 118.2(2)(i) states " for, or in respect of....an aid to hearing." As this wording is quite broad, we have taken the position that this would encompass not only the cost of a hearing aid but also related items such as batteries, repairs and warranty costs. We have taken similar positions relating to other devices in paragraph 118.2(2)(i).
XXXXXXXXXX 2007-024703
February 6, 2008
Dear XXXXXXXXXX :
Re: Medical Expense Tax Credit - Hearing Aid
This is in response to your letter of July 25, 2007, inquiring about whether the cost of an extended warranty service contract in respect of a hearing aid qualifies as a medical expense for purposes of the medical expense tax credit.
The situation outlined in your letter appears to relate to a factual one. It is not this Directorate's practice to comment on proposed transactions involving specific taxpayers other than in the form of an advanced income tax ruling. For more information about how to obtain a ruling, please refer to Information Circular 70-6R5, "Advanced Income Tax Rulings, dated May 17, 2002. This Information Circular and other CRA publications can be accessed on the internet at http://www.cra-arc.gc.ca. Should your situation involve a specific taxpayer and a completed transaction, you should submit all relevant facts and documentation to the appropriate Tax Services Office ("TSO") for their views. A list of TSOs is available on the "Contact Us" page of the CRA website. Although we cannot comment on your specific situation, we are prepared to provide the following general comments, which may be of assistance.
As discussed during the telephone conversation (Moore/XXXXXXXXXX) on February 4, 2008, medical expenses that qualify for the medical expense tax credit are defined in subsection 118.2(2) of the Income Tax Act (the "Act"). Paragraph 118.2(2)(i) of the Act describes an amount paid for or in respect of certain medical devices including "an aid to hearing" for the patient. In our view, the cost of an extended warranty for a hearing aid would be an amount paid in respect of an aid to hearing and, therefore, would qualify for the medical expense tax credit.
We trust that these comments will be of assistance.
Yours truly,
G. Moore
For Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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