9 March 2011 External T.I. 2011-0397231E5 - Sleep Evaluation Study - Medical Expenses

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 a sleep evaluation study paid to a private sleep clinic qualifies as medical expenses for purposes of the METC

Position: Yes

Reasons: A sleep evaluation study meets the conditions of paragraph 118.2(2)(o) which includes diagnostic procedures for maintaining health.

XXXXXXXXXX 							2011-039723
								S. D'Angelo
March 9, 2011

Dear XXXXXXXXXX :

Re: Medical Expense Tax Credit - Sleep Evaluation Study

This is in response to your correspondence of February 24, 2011, inquiring about whether costs incurred for a sleep evaluation study paid to a private sleep clinic will qualify as medical expenses for purposes of the medical expense tax credit ("METC").

The particular situation outlined in your letter appears to relate to a factual one, involving one or more specific taxpayers. As explained in Information Circular 70-6R5, it is not this Directorate's practice to comment on transactions involving specific taxpayers other than in the form of an Advance Income Tax Ruling. An Advance Income Tax Ruling is not issued where a transaction has been completed or is significantly advanced. In those instances you should submit all relevant facts and documentation to the appropriate Tax Services Office for their views. However, we are prepared to offer the following general comments which may be of assistance.

Our comments

Amounts paid by an individual to a "medical practitioner" or to a "public or licensed private hospital" to obtain medical services qualify as medical expenses for purposes of the medical expense tax credit pursuant to paragraph 118.2(2)(a) of the Income Tax Act (the "Act"). The term "medical practitioner" can include individuals such as 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. The term "licensed private hospital" is not defined in the Act but generally is considered to mean that a hospital is licensed by the jurisdiction in which it operates.

Pursuant to paragraph 118.2(2)(o) of the Act, 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. You have not indicated in your letter whether the purpose of the sleep evaluation study was for any of the reasons described above. However, it is our view that the cost of a sleep evaluation study paid to a private sleep clinic would generally qualify as a medical expense for purposes of the METC if the requirements of paragraph 118.2(2)(o) are met.

We trust our comments will be of assistance.

Yours truly,

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