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: Status of a retirement centre as a nursing home
Position: Position of the department explained
Reasons:
XXXXXXXXXX 981382
. Mondou, M.Fisc.
Attention: XXXXXXXXXX
May 29, 1998
Dear Sir:
Re: Qualification as a nursing home
Recently, a taxpayer inquired as to whether part of the fees paid to your organization qualified as medical expenses. We were provided with a copy of a letter which the taxpayer indicated you sent to a resident and in which you state that XXXXXXXXXX is not a nursing home. You also state that 15% of the accommodation fees would be allocated to cover the attendant nursing care provided in your establishment.
While paragraphs 118.2(2)(b) and (d) Income Tax Act (the “Act”) allow as a medical expense the cost of full-time care in a nursing home, it is the position of this Department that a particular place does not necessarily need to be licensed as a nursing home in order to be considered as such; however, it must have sufficient staff to operate as a nursing home. In other words, the facility must have the equivalent features and characteristics of a nursing home in order to qualify as a nursing home for the purpose of the medical tax credit. Hence, it must provide sufficient calibre and number of qualified medical personnel to provide nursing care to its residents on a 24-hour basis. In the case of a facility which provides multiple levels of care, the portion of the facility which provides regular nursing care of the type provided by a nursing home will qualify as a nursing home and the portion of the facility which does not, will not so qualify.
For your information, we are enclosing a copy of a technical interpretation we issued on July 13, 1995 to the Individual Returns and Payments Processing Directorate (E9512696). This technical interpretation will provide you with additional details with respect to the requirements for qualification as medical expenses of payments to a facility that provides care to seniors.
You may wish to contact XXXXXXXXXX Tax Services Office to clarify your status as a nursing home for purposes of paragraph 118.2(2)(b) or (d) of the Act.
Should your establishment not qualify as a nursing home, we wish to bring to your attention that paragraph 118.2(2)(b) of the Act also allows as a medical expense the remuneration paid by a taxpayer for one full-time attendant. Since the Act refers to an amount “paid as remuneration”, it is our view that only amounts for salary or remuneration that are actually paid to the attendant for the care of the patient will qualify as medical expenses under this provision. Imputed salary or remuneration will not qualify since no actual payment is made.
Finally, to claim the costs mentioned above as medical expenses, the patient must meet certain criteria, which are discussed in the enclosed copy of our technical interpretation. This requires a case by case review of each patient’s circumstances.
We trust that these comments are of assistance.
Yours truly,
P. Spice
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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