30 September 2011 External T.I. 2011-0415601E5 - In vitro fertility program

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.

Principal Issues: Whether amounts paid to facilitate in vitro fertilization related to sperm and embryo freezing would qualify as medical expenses eligible for the medical expense tax credit.

Position: Yes.

Reasons: The above-mentioned services would qualify as medical services since they relate to the medical condition of infertility.

XXXXXXXXXX 							2011-041560
								Charles Rafuse
September 30, 2011

Dear XXXXXXXXXX :

Re: Medical expense tax credit - In vitro fertility program

This is in response to your email of July 28, 2011, regarding whether amounts paid to facilitate in vitro fertilization ("IVF") would qualify as medical expenses for purposes of the medical expense tax credit ("METC"). In particular, you asked whether the cost of sperm freezing and embryo freezing and storage would qualify as medical expenses.

Our Comments

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office (the "TSO"). We are, however, prepared to make the general comments set out below, which may be of assistance.

Section 118.2 of the Income Tax Act (the "Act") provides rules for determining the amount that may be claimed, as a tax credit, in respect of medical expenses. Subsection 118.2(2) of the Act contains a list of expenditures that qualify as medical expenses. The CRA's views with respect to medical expenses are outlined in Interpretation Bulletin, IT-519R2 (Consolidated), "Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction" ("IT-519R2"). This document is posted on the CRA's website at: http://www.cra-arc.gc.ca/E/pub/tp/it519r2-consolid/README.html.

Paragraph 118.2(2)(a) allows an individual to include, as a qualifying medical expense, an amount paid to a medical practitioner, dentist or nurse or a public or licensed private hospital for medical or dental services provided to the patient. The term "medical practitioner" includes a medical doctor, dentist, pharmacist, nurse or optometrist provided that he or she is authorized to practice in the stated profession according to the laws of the jurisdiction in which the service is rendered, whereas "licensed private hospital" means licensed by the jurisdiction in which the hospital operates. The amount paid by an individual has to be in respect of medical services provided to the individual, the individual's spouse or common law partner, or to the individual's dependant.

In addition, pursuant to paragraph 118.2(2)(o), qualifying medical expenses include amounts paid for laboratory, radiological or other diagnostic procedures or services, with necessary interpretations, for maintaining health, preventing disease or assisting in the diagnosis or treatment of an injury, illness, or disability as prescribed by a medical practitioner. Paragraph 59 of IT-519R2 states: "An example of such expenses, which may not be covered by provincial health insurance, are the following expenses involved with artificial insemination:

(a) the in-vitro fertilization procedure;
(b) daily ultrasound and blood tests once the in-vitro procedure has begun;
(c) anaesthetist fees; and
(d) cycle monitoring fees."

In our view, the cost of sperm freezing and egg freezing and storage would qualify as medical services since they relate to the medical condition of infertility. Therefore, provided the amount is paid by an individual to a medical practitioner or to a public or licensed private hospital in respect of services provided to the individual, or to the individual's spouse, common law partner or dependant, such amounts would qualify as medical expenses.

We trust that these comments will be of assistance.

Yours truly

G. Moore
For Director
Business and Partnership Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch