4 November 1997 External T.I. 9724645 - MEALS, PER KM RATE FOR 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.

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:

cost of meals and gas related to medical travel by automobile which is not supported by receipts

Position:

Although 118.2(1) requires receipts to be submitted, $.10 per km can be allowed in 96 as a reasonable approximation of the out-of-pocket costs for medical travel - fuel only - no admin position set with respect to unreceipted meals

Reasons:

118.2(2)(h) allows "reasonable travel costs" and 118.2(4) modifies 118.2(2)(g) so that a "reasonable amount for the operating costs" of an auto are deemed to qualify under (g) - in the case of occasional medical travel, it is reasonable to restrict the claim to fuel only - in the case of an ongoing situation involving repeated travel, it may be reasonable to add other misc operating costs -however, no amount of CCA or other fixed costs are reasonable

A. Humenuk
XXXXXXXXXX		                                 972464

November 4, 1997

Dear Sir:

Re: Travel Costs Incurred to Obtain Medical Services

We are replying to your letter of September 8, 1997. We understand that your question relates to meals consumed away from home for a patient and driver when obtaining medical treatment, as well as other related costs, and whether such costs qualify as medical expenses for the purpose of the medical expense tax credit.

We apologize for the misunderstanding which arose as a result of the letter of August 26, 1997 from the Sudbury Tax Services Office concerning the issuance of advance income tax rulings. While there is a charge for advance income tax rulings issued by this Directorate, a ruling request is not required in order to obtain a technical interpretation or explanation of the issues related to your question.

The Income Tax Act (the "Act") provides a medical expense tax credit in respect of eligible medical expenses which are proven by filing receipts therefor with a taxpayer's income tax return. Although there is a legislative requirement to submit receipts for the total of all medical expenses claimed, the Department recognizes that receipts may not always be available, particularly where the individual was unaware that this requirement applied in respect of the travel costs to obtain medical services.

The types of expenses which qualify as medical expenses for the purpose of the medical expense tax credit are set out in subsection 118.2(2) of the Act and are described in Interpretation Bulletin IT-519R, Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction. While an individual may incur other costs in the course of obtaining medical treatment, such as postage, photocopying, courier charges, long distance telephone charges or over-the-counter medication, such amounts do not qualify for the medical expense tax credit, because the credit is only available in respect of expenses described in subsection 118.2(2) of the Act.

Paragraphs 35 to 37 of IT-519R explain the circumstances under which travel costs may qualify as a medical expense for the purpose of the medical expense tax credit. It should be noted that the travel cost for a companion who accompanies a patient only qualifies as a medical expense if the patient is certified by a medical practitioner to be incapable of travelling without an attendant. The fact that an individual is unable to drive a vehicle is not a factor in determining whether such costs qualify.

In determining whether the cost of travel qualifies as a medical expense for a particular individual, it is necessary to determine whether substantially equivalent medical services are available within the individual's locality. If the necessary medical services are not available within a 40 kilometre radius of the individual's home, the amount paid to a person engaged in the business of providing transportation for the required travel qualifies as a medical expense. If the distance between the place where the medical service is provided and the patient's home locality is more than 40 kilometres but less than 80 kilometres, the cost of using the patient's vehicle does not qualify as a medical expense unless the services of a person engaged in the business of transportation are not readily available. For this purpose, such transportation services are considered to be readily available if the reason for using a personal vehicle is one of convenience. Where there is some urgency to a situation such that immediate or at least prompt transportation to the location providing the requisite medical service is necessary and a person engaged in the business of providing transportation services cannot be located quickly or is only available after an unacceptable delay of time, it is reasonable to accept that the service is not readily available for that particular trip. Under most circumstances, however, it is reasonable to expect that a person engaged in the business of providing transportation services would be available for the purpose of transporting a patient to regular, pre-scheduled medical appointments within an 80 kilometre radius of the patient's home.

When travelling expenses are claimed under paragraph 118.2(2)(g) of the Act, as modified by subsection 118.2(4) of the Act, or under paragraph 118.2(2)(h) of the Act, and receipts are not available, the Department is prepared to allow a reasonable estimate of the actual travel costs incurred in relation to the distance travelled to obtain medical services.

It is our view that $.10 per kilometre is a reasonable estimate of the fuel consumption cost incurred for such travel in 1996. When the travel involves one or two trips only, it is reasonable to restrict the amount of automobile expenses which qualify as a medical expense to the cost of fuel only. If repeated trips are required, other operating costs of the automobile may be allowed as well. However, operating costs do not include interest, capital cost allowance or lease costs. Unfortunately, the information that was provided to you concerning the rate used to estimate actual operating costs of an automobile for the purpose of the medical expense tax credit in 1994 was incorrect. A rate of $.37 per kilometre reflects a portion of the fixed costs of leasing or owning an automobile, which costs are not part of the costs that generally qualify as a medical expense.

The cost of meals and lodging incurred in travelling may qualify as a medical expense provided that the conditions set out in paragraph 118.2(2)(g) or (h) of the Act apply, the amount is reasonable in the circumstances and the expense is proven by receipt. You suggest that a discount of 50% is often available if a traveller does not request a receipt for services rendered. As stated above, there is a legislative requirement to submit receipts for all medical expenses claimed.

We hope our comments have clarified the technical issues related to your question. If you have any specific questions concerning your claim for medical expenses, you should contact the Kitchener-Waterloo Tax Services Office.

Yours truly,

C. Chouinard
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch