6 May 2008 External T.I. 2007-0255191E5 - Whether water softener qualifies for METC

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: A taxpayer and his family suffer from eczema and have a prescription from their doctor for a water softener for purposes of alleviating the conditions of this ailment. The taxpayer wants to claim the water softener under the medical expense tax credit provisions, and, in particular, under paragraph 118.2(2)(m) of the Act and paragraph 5700(c.1) which refers to a "...water filter or purifier for use by an individual who is suffering from ... a severe chronic immune system disregulation to cope with or overcome that ailment."

Position: It is a question of fact whether all of the conditions in the relevant METC provisions are met. However, it is our view that a water softener may be considered a water filter or purifier for these purposes.

Reasons: A water filter or purifier is not defined in the Act and thus, under their ordinary meanings, encompass a water softener.

XXXXXXXXXX 							2007-025519
J. Gibbons, CGA
May 6, 2008

Dear XXXXXXXXXX :

Re: Water Softener as a Medical Expense

In an email to us dated October 1, 2007, you questioned whether a water softener that is acquired for someone suffering from eczema pursuant to a written prescription from a doctor qualifies for the medical expense tax credit. In support of this treatment, you cited paragraph 56 of IT-519R2 (Consolidated), Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, which discusses paragraph 118.2(2)(m) of the Income Tax Act (the "Act") and paragraph 5700(c.1) of the Income Tax Regulations (the "Regulations").

Since your enquiry concerns an actual situation involving questions of fact, it should be dealt with by one of our Tax Services Office. Nonetheless, we have provided our general views regarding the application of the relevant provisions of the Act and Regulations. If you wish a more specific reply, you should submit all of the relevant facts and documentation to the particular Tax Services Office serving your area, a list of which is available on the "Contact Us" page of the Canada Revenue Agency website.

In general terms, paragraph 56 of IT-519R2 explains that a particular device or equipment will qualify as a medical expense under paragraph 118.2(2)(m) of the Act if it is included in the list of devices and equipment under section 5700 of the Regulations and if it is for the patient's use as prescribed by a medical practitioner. Subparagraph 118.2(2)(m)(iv) of the Act also provides that a particular device or equipment must also meet such conditions as are prescribed to its use or as to the reason for its acquisition. Under the list of prescribed devices or equipment in section 5700 of the Regulations, paragraph (c.1) describes an "air or water filter or purifier for use by an individual who is suffering from a severe chronic respiratory ailment or a severe chronic immune system disregulation to cope with or overcome that ailment or disregulation".

Based on the foregoing, in order to qualify under paragraph 5700(c.1) of the Regulations, a water softener must, among other things, be considered a water filter or purifier. In this regard, since the Act has no definition of a water filter or purifier, these terms must be interpreted using their everyday or common meaning. In Merriam-Webster's online dictionary, a filter includes "a porous article or mass (as of paper or sand) through which a gas or liquid is passed to separate out matter in suspension", while a "purifier" takes its meaning from the verb to purify, which is defined as "to make pure as ... to clear from material defilement or imperfection."

According to the Canada Mortgage and Housing Corporation website, a water softener works by employing a medium that serves to exchange ions of calcium and magnesium, those elements that make water "hard", with sodium and potassium. To do the ion replacement, water is run through a resin bed of small plastic beads or zeolite covered with sodium or potassium ions, which simply swap places with the calcium or magnesium. Eventually, the beads contain nothing but calcium and magnesium and must be regenerated with a salty, brine solution that is rich in sodium or potassium. On the basis of this description, it is our view that a water softener may be considered a water filter or a water purifier for purposes of paragraph 5700(c.1) of the Regulations.

Another condition that flows from the description in paragraph 5700(c.1) of the Regulations is that the water purifier must be for use by an individual suffering from a severe chronic immune system disregulation to cope with or overcome that ailment or disregulation. On this issue, it is incumbent on the taxpayer to be able to demonstrate that this condition is met by reference to the prescription from the medical practitioner. Thus, the prescription would have to state that the water filter or purifier is for use by an individual who is suffering from a severe immune system disregulation to cope with or overcome that disregulation.

Yours truly,

Gwen Moore
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch