23 January 2008 External T.I. 2007-0253261E5 - Medical Expenses - Accommodation; Daily Travel

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 cost of accommodation near hospital to be with newborn baby is an eligible medical expense. Whether spouse's cost of daily travel to hospital to visit baby and its mother is an eligible medical expense.

Position: Yes. No.

Reasons: Cost of accommodation eligible on the basis it was for the baby's attendant. Daily travel not eligible since 118.2(2)(h) is limited to one attendant and also because travel for the purpose of visiting is not travel to obtain medical services.

								2007-025326
XXXXXXXXXX 							Amanda Riddell,
LL. B
(613) 957-2128
January 23, 2008

Dear XXXXXXXXXX :

RE: Medical Expense Tax Credit - Accommodation and Daily Travel

This is in response to your letter of September 17, 2007 inquiring whether certain travel expenses are eligible expenses for the purposes of the medical expense tax credit.

It is my understanding that your client was required to travel to a hospital more than 80 kilometres outside of her municipality to see a medical specialist with regard to her high-risk pregnancy. While on a regular check up, it became apparent that the baby had to be delivered immediately. After the delivery, the baby was required to remain in the hospital for two months, during which period your client stayed at the Ronald McDonald House in order to stay with the baby. Your client's spouse travelled to the hospital each day to be with the baby and its mother. After two months, the baby was transferred to a hospital in the municipality where the parents normally reside.

You have asked whether the cost of staying at the Ronald McDonald House and the cost of the spouse's daily travel (including meal expenses) are eligible travel expenses under paragraph 118.2(2)(h) of the Income Tax Act (the "Act").

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. This circular is available on-line at www.cra-arc.gc.ca/E/pub/tp/ic70-6r5/README.html. 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. The Canada Revenue Agency's general views regarding the medical expense tax credit are contained in our Interpretation Bulletin IT-519R2, Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, which is available on-line at www.cra-arc.gc.ca/E/pub/tp/it519r2-consolid/README.html.

Section 118.2 of the Act provides rules for determining the amount that may be claimed, as a tax credit, in respect of medical expenses. Subsection 118.2(2) of the Act contains a list of expenditures that qualify as medical expenses.

Reasonable travel expenses, including vehicle, food and lodging expenses, may qualify as medical expenses under paragraph 118.2(2)(h) of the Act if an individual travels not less than 80 kilometres from the locality where the individual dwells to a place where medical services are received. Travel expenses for an accompanying individual may also qualify under paragraph 118.2(2)(h) if the patient has been certified by a medical practitioner as being incapable of travelling alone, which is usually the case when the patient is a minor. Travel expenses may be claimed as medical expenses only if the following requirements are met:

i) substantially equivalent medical services were not available in the individual's locality,

ii) a reasonably direct travelling route was taken by the individual, and

iii) the individual travelled to the particular place to obtain medical services for himself or herself and it is reasonable, having regard to the circumstances, for the individual to have travelled to that place for medical services.

Whether or not the above-noted requirements are met is a question of fact. Given the limited information provided, it appears that the cost of your client's stay at the Ronald McDonald House would qualify as a medical expense under paragraph 118.2(2)(h) based on her status as the baby's attendant. Since paragraph 118.2(2)(h) is limited to one attendant, your client would have the choice of claiming the travel expenses for her stay at the Ronald McDonald House or for her spouse's initial travel expenses when he accompanied the patient to the hospital, but not both. Furthermore, the spouse's daily travel for the purpose of visiting would not be considered travel to obtain medical services.

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