20 May 1998 External T.I. 9800795 - MED. EXP. - ELECTRIC SCOOTER, VAN, LIFT

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 an electric scooter, a van modified for a wheelchair, an electric lift installed in the van, and other vehicle modifications intended for a disabled driver qualify as medical expenses.

Position:

The expenditures may qualify depending on the particular facts.

Reasons:

1. A wheelchair qualifies under paragraph 118.2(2)(i). A scooter will be considered a wheelchair if acquired as a substitution for a wheelchair. In this regard, the scooter should be acquired for mobility and not transportation or recreation.

2. 20% of the cost of a van will qualify if adapted at the time of acquisition or 6 months later for a patient who requires the use of a wheelchair.

3. A power-operated lift to enable a disabled individual to gain access to a vehicle and devices to enable an individual with a mobility impairment to operate a vehicle qualify under paragraph 18.2(2)(m) if they are prescribed by a medical practitioner.

XXXXXXXXXX 5-980079
J. Gibbons

May 20, 1998

Dear XXXXXXXXXX:

We are replying to your letter of December 29, 1997, in which you inquire whether certain expenditures related to your disabilities qualify for the medical expense tax credit. The expenditures are in respect of the acquisition of an electric scooter, the acquisition of a van modified for your disabilities, modifications to your van to enable you to drive, and an electric lift installed in your van.

Written confirmation of the tax implications inherent in particular transactions are given by this Directorate only where the transactions are proposed and are the subject matter of an advance ruling request submitted in the manner set out in Information Circular 70-6R3. The following comments are, therefore, of a general nature only.

As indicated in paragraph 36 of Interpretation Bulletin IT-519R2 (“Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction”), a copy of which is enclosed, amounts paid for or in respect of a wheelchair qualify as a medical expense by virtue of paragraph 118.2(2)(i) of the Income Tax Act (the “Act”). In addition, paragraph 38 of IT-519R2 states that the term “wheelchair” includes a scooter. However, it is our view that an electric scooter will be regarded as a wheelchair only in circumstances where the taxpayer acquires it in substitution for a wheelchair. In other words, the cost of a scooter will only qualify as a medical expense if the taxpayer is in need of a “wheelchair” to improve his or her mobility.

With respect to the cost of a new van, as indicated in the Note under paragraph 56 of IT-519R2, Bill C-28 contains amendments which will expand the list of medical expenses to include, among other things, the lesser of: (a) 20 percent of the cost of acquiring a new van that is adapted either at the time of acquisition or six months later for the transportation of the patient who requires the use of a wheelchair and (b) $5,000. This amendment, when passed, will be effective for 1997 and subsequent taxation years.

With regard to the other items, paragraph 118.2(2)(m) of the Act provides the authority for including various types of devices and equipment as medical expenses for purposes of the medical expense tax credit. To qualify under paragraph 118.2(2)(m) of the Act, the device or equipment must satisfy the following conditions: (i) be of a prescribed kind; (ii) be prescribed by a medical practitioner; (iii) not be described in any other paragraph; and (iv) meet such conditions as may be prescribed as to its use or the reason for its acquisition. Section 5700 of the Income Tax Regulations (the “Regulations”) lists the devices and equipment that are of a prescribed kind. Paragraph 5700(m) of the Regulations refers to, among other things, power-operated lift equipment designed exclusively for use by or for a disabled individual to gain access to a vehicle or to place the individual’s wheelchair in or on a vehicle. Paragraph 5700(n) of the Regulations refers to a device designed exclusively to enable an individual with a mobility impairment to operate a vehicle. Accordingly, power-operated lift equipment and driving devices, such as a steering knob and a right-turn signal adapter, may qualify as medical expenses provided that they are prescribed by a medical practitioner and meet the other conditions noted above.

We trust that these comments will be of assistance.

Yours truly,

P. Spice
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

Encl.