2 February 2009 External T.I. 2009-0306221E5 - Medical 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 costs incurred for accommodations during period of treatment are qualified medical expenses.

Position: No

Reasons: Travel costs incurred while en route to obtain medical services include costs for accommodations. Travel costs do not include costs for hotel accommodations throughout the period of treatment.

2009-030622
XXXXXXXXXX Rob Ferrari
(613) 957-2138
February 2, 2009

Dear XXXXXXXXXX :

Re: Medical Expense Tax Credit - Travelling

This is in response to your correspondence of January 6, 2009 inquiring about costs for accommodations incurred during a period in which your client was receiving treatment for cancer.

In the situation you described, your client became ill while on vacation in British Columbia. He was unable to return home and stayed at a hotel during the course of his treatment. You ask whether the hotel costs are eligible 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, 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.

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.

It is our view the expenses incurred for hotel accommodations during the period of treatment do not qualify as eligible travel expenses under subsection 118.2(2) of the Act.

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