26 October 1994 External T.I. 9417485 - MEDICAL EXPENSE AND DISABILITY TAX CREDITS

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:

Are fees paid to a clinic deductible pursuant to 118.2(2)(a)?

Would the clinic qualify as a "private licensed hospital" for the purposes of the ITA?

Are medical services being provided to the clients?

Are the clients being reimbursed? (118.2(3)(b))?

Position TAKEN:

Question of fact. Unable to determine from information provided. Each individual case must be reviewed.

Reasons FOR POSITION TAKEN:

It is very possible that the clinic is a "licensed private hospital" however, not enough information has been provided to determine this. In addition, each individual case should be reviewed to ensure that medical services are being provided. If the clinic is not a licensed private hospital then to whom are the payments made? Do they meet the definition of a medical practitioner? With respect to the source of funding/payments it would also be necessary to determine if a reimbursement has taken place.

				941748

XXXXXXXXXX		D. Zion

Attention: XXXXXXXXXX

October 26, 1994

Dear XXXXXXXXXX:

Re: Medical Expense and Disability Tax Credits

We are writing in reply to your letter of June 24, 1994 regarding the eligibility of payments made by patients to the XXXXXXXXXX (the "Clinic") for the above-noted tax credits under the Income Tax Act (the "Act"). We apologize for the delay in our response.

In determining whether a particular payment fulfils the requirements of the Act as a qualifying medical expense, it is primarily the individual in respect of whom the payment is made who must satisfy the requirements of the Act. Since it would involve a finding of fact with respect to each individual as to whether or not the payments would qualify as medical expenses, we are unable to respond to your enquiry by way of an advance income tax ruling. It is also a question of fact and individual circumstance whether a particular individual qualifies for the disability tax credit. We are, however, prepared to offer the following general comments which should be of assistance to you.

Our Comments

Amounts paid to a medical practitioner, dentist or nurse or a public or licensed private hospital, in respect of medical or dental services provided to the individual, the individual's spouse or to certain dependants qualify for the medical expense tax credit. Since subsection 118.4(2) of the Act defines the term "medical practitioner" (in the context of medical services provided) as a person who is authorized to practice as such pursuant to the laws of the jurisdiction in which the service is rendered, we look to the relevant provincial legislation to determine whether the particular health professional is so authorized and regulated by statute.

In the case where an individual is reimbursed for the medical expenses, whether directly or through payment to the medical practitioner or hospital, and this reimbursement is not included in the individual's income, the amount of medical expenses that would otherwise be eligible for the medical expense tax credit pursuant to paragraph 118.2(3)(b) of the Act will be reduced by the amount of the reimbursement. Whether or not a reimbursement has been received, can only be determined by a review of all the facts of each individual case.

With respect to the disability tax credit, it is a medical doctor, or where the impairment is an impairment of sight, a medical doctor or an optometrist, who is the duly authorized person to certify the extent of an individual's disability for the purposes of the disability tax credit under section 118.3 of the Act. While section 118.4 of the Act codifies the eligibility criteria by defining what is a basic activity of daily living for the purposes of the disability credit and by specifying the circumstances under which an impairment is considered to markedly restrict an individual's ability to perform such an activity, a case by case determination is necessary. It is the effect of the impairment on the ability to perform the activities of daily living, which effect differs between individuals, rather than the ailment or condition itself, which determines whether an individual is eligible for the disability amount. We have no way of knowing, given the information provided to us, whether or not a particular individual under the Clinic's care might be eligible for this credit.

For your information, we have enclosed Interpretation Bulletin IT-519: Medical Expense and Disability Tax Credits, which contains a more detailed discussion of these credits. Should one of your patients wish a more definitive response with respect to the deductibility of their payments to your clinic, we recommend that they submit all relevant facts and documentation to their local district taxation office for their comments.

We trust that this information will be of assistance to you.

Yours truly,

P.D. Fuoco
for Director
Business and General Division
Rulings Directorate
Policy and Legislation Branch