3 February 2009 External T.I. 2008-0303871E5 - Meals and Accommodations as Medical Expenses

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 meals and accommodations of an accompanying individual qualify as medical expenses during the period the patient stays in a hospital.

Position: No

Reasons: The cost of accommodations and meals of the patient and an accompanying individual while travelling to and from the hospital likely qualify as medical expenses. Once the patient is in the hospital and the accompanying individual is staying in the hotel, these costs are no longer travelling expenses

2008-030387
XXXXXXXXXX Rob Ferrari
(613) 957-2138
February 3, 2009

Dear XXXXXXXXXX :

Re: Travel expenses for individual and attendant

This is in response to your correspondence of December 15, 2008 and further to the conversation of January 23, 2009 (XXXXXXXXXX /Ferrari) inquiring about travelling costs for purposes of the medical expense tax credit ("METC").

In the situation you described, an elderly patient travelled 176 kilometres for surgery, which required hospitalization for three days. An acquaintance travelled with the patient and stayed at a hotel for the period the patient was in the hospital before returning home. The patient paid for the meals and accommodations of the individual throughout the trip and you ask whether these costs qualify as medical expenses.

The situation outlined in your letter appears to relate to a factual one, involving a specific taxpayer. 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.

Our Comments:

Section 118.2 of the Income Tax Act (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.

An amount paid to a person engaged in the business of providing transportation services to transport an individual not less than 40 kilometres from the locality where the individual resides to a place where medical services are received may qualify as a medical expense under paragraph 118.2(2)(g) of the Act. Other reasonable travel expenses (including vehicle, meals and accommodations) while travelling to food and lodging expenses) may qualify as medical expenses under paragraph 118.2(2)(h) of the Act if the individual travels not less than 80 kilometres from the locality where the individual dwells to a place where medical services are received. If you have to travel more than 80 kilometres (one way) for medical treatment, in addition to travel costs, you may be able to claim the cost of your meals and accommodations. Transportation and travel expenses for an accompanying individual may qualify under paragraphs 118.2(2)(g) and (h) of the Act, but only if the patient has been certified by a medical practitioner as being incapable of travelling alone.

An individual is entitled to claim transportation and travel expenses under paragraphs 118.2(2)(g) and (h) provided 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.

Expenses meeting the criteria under paragraphs 118.2(2)(g) and (h) are generally allowed to the extent that they are reasonable and there is no reason to preclude their deduction (for example, if an insurance company were to reimburse the expenses).

Based on the information provided to us, it appears the meals and accommodations (if any) qualify as medical expenses for the period of travel while travelling to and from the hospital for the patient, and if the patient has been certified by a medical practitioner as being incapable of travelling alone, for the accompanying individual. However, there is no provision in the Act which would allow the accompanying individual's meal and accommodation expenses to qualify for the period while the patient was in the hospital.

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