23 March 1994 Internal T.I. 9406816 - COMPUTER COST AS A MEDICAL EXPENSE

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Whether cost of personal computers are allowable in the computation of the medical expense tax credit

Position TAKEN:

No, it is not allowable.

Reasons FOR POSITION TAKEN:

1.It is not a piece of equipment described in Regulation 5700 or any other paragraph of subsection 118.2(2).

2. It is not designed exclusively for use by blind individuals.

		March 23, 1994

	Client Assistance Directorate	Head Office
	Correspondence Division	Rulings Directorate
	Louis Lamontagne, A/Chief	J.A. Szeszycki
(613) 957-8953
		940681

Medical Expense Credit - Cost of Personal Computer

This is in reply to your note of March 16, 1994 to which you attached correspondence to the Minister requesting consideration for allowing the cost of a personal computer, and accessories, to be used in the computation of the medical expense tax credit. You have asked whether the items in question could be said to be described in paragraph 5700(o) of the Income Tax Regulations.

As we understand the situation described in one of the ministerial correspondence, a taxpayer's 11-year old son has a medical condition which, among other things, includes complete blindness in one eye and only 10 percent vision in the other eye. The son's school has provided an IBM compatible computer for his use at school. It enables the school to enlarge the print size to a point where the son is able to read on his own. The taxpayer has purchased a similar computer for use by his son at home, such that diskettes prepared at school with homework can be dealt with at home without constant parental or teacher assistance.

The other ministerial correspondence involves an individual who, upon the recommendation of physicians, acquired such things as magnifying devices, glasses, and computer equipment including software and peripherals. As in the previous case, the taxpayer has been advised that the cost of the computer is not allowable for the purposes of the medical expense tax credit.

In the following comments, unless otherwise stated, all statute references are to the Income Tax Act 1970-71-72, c. 63 as amended, consolidated to June 10, 1993 (the "Act").

As you are aware, the authority for the use of the costs of devices and equipment is contained in paragraph 118.2(2)(m) of the Act. Subparagraph (i) of that provision sets out the requirement that the equipment or device be of a prescribed kind. Regulation 5700, as you noted, contains the list of equipment and devices prescribed for this purpose. Where an item in question is not described in any of the paragraphs contained in the regulation, then it does not qualify for a claim under paragraph 118.2(2)(m) of the Act.

Paragraphs (l) and (o) of the regulation describe devices and equipment that assist individuals with severe visual impairment. Paragraph (l) describes an optical scanner or similar device designed to be used by a blind individual to enable him to read print. Paragraph (o) describes a device or equipment, including a synthetic speech system, braille printer and large print-on-screen device, designed exclusively to be used by a blind individual in the operation of a computer. The wording of this latter provision clearly distinguishes between a computer and those devices which assist a blind individual in using one.

The underlined phrases are used frequently in regulation 5700 to distinguish between devices and equipment that were created for the purpose of relieving a medical condition suffered by the patient and those common devices designed primarily for non-medical use but which are being adapted for a medical purpose. In the Tax Court of Canada case, N.E. Brown v. MNR 89 DTC 1, the Court concluded, in reference to a claim for an air conditioning unit, that the unit "...was not, in any sense of the word, designed to assist an individual in walking...I cannot accept the proposition that it is the taxpayer's subjective purpose or intention which is determinative of this issue."

In summary, therefore, regardless of the fact that the computer in each case was acquired for the specific purpose of dealing with the medical condition of the patient, and would likely not be acquired otherwise, such a fact is not determinative of whether a claim may be made under paragraph 118.2(2)(m) of the Act.

B.W. Dath
Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch