16 February 2011 External T.I. 2011-0392871E5 - medical expenses - medical device

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 a "Water Well" qualifies as a medical device as prescribed by Regulation 5700?

Position: No.

Reasons: A Water Well is not a medical device prescribed by Regulation 5700, nor is the cost of a Water Well allowed as an eligible medical expense under subsection 118.2(2) of the ITA.

XXXXXXXXXX 				2011-039287
					J. Gibbons, CGA

February 16, 2011

Dear XXXXXXXXXX :

This is in reply to your letter, which you faxed to us on January 16, 2011, concerning a "Water Well" for warm water therapy. You are considering the purchase of this device as a means to alleviate your symptoms from "Post Polio Syndrome, and you wish to know whether the cost of the Water Well would qualify as a medical expense for purposes of the medical expense tax credit ("METC") under section 118.2 of the Income Tax Act (the "Act").

You were diagnosed with Post Polio Syndrome in 2005. There are no treatments for this disease, which entails symptoms such as extreme fatigue and muscle weakness and pain. Your physician has prescribed warm water therapy as a means of alleviating some of the symptoms of this disease. In this regard, you are contemplating the purchase of a Water Well, which is made by Endless Pools, a U.S. company.

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. Also, where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. Nonetheless, we are prepared to offer the following general comments.

Medical expenses which are eligible for the METC are limited to those described in subsection 118.2(2) of the Act. If a particular expenditure is not described as an eligible medical expense in subsection 118.2(2) of the Act, or if the conditions under which the expenditure would qualify are not met, the expenditure does not qualify for purposes of the METC, even though the expenditure may have been incurred for medical reasons.

Under paragraph 118.2(2)(m) of the Act, a payment in respect of a device or equipment may qualify as a medical expense if certain conditions are met. Generally, to qualify, the device or equipment must be prescribed by a medical practitioner, must be included in the list of qualifying devices or equipment described in section 5700 of the Income Tax Regulations (the "Regulations") and must meet such conditions as are prescribed by the Regulations as to its use or the reason for its acquisition.

In our view, a Water Well does not qualify under any of the provisions in subsection 118.2(2) of the Act or section 5700 of the Regulations.

We trust 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