29 June 1995 External T.I. 9503695 - MEDICAL EXPENSE CREDIT - INVITRO FERTILIZATION

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 costs incurred for in vitro fertilization with cytoplasmic sperm injection (ICSI) program at the XXXXXXXXXX qualifies as "medical expenses" for purposes of 118.2(2)

Position TAKEN:

to the extent that an amount does not qualify under para 118.2(2)(a), paragraphs (n) and (o) may provide relief. Travel is limited to the extent provided by paragraphs 118.2(2)(f), (g) and (h)

Reasons FOR POSITION TAKEN:

accept that ICSI program is in respect of medical services per several dictionary definitions of this terminology

			950369
XXXXXXXXXX		Sandra Short

June 29, 1995

Dear XXXXXXXXXX:

Re: Advance Income Tax Ruling for XXXXXXXXXX

This is in reply to your letter dated February 3, 1995 which requests an advance tax ruling on behalf of your clients, XXXXXXXXXX. Your request concerns medical costs incurred by your clients in connection with procedures and services provided by the XXXXXXXXXX.

As discussed in paragraphs 5 and 6 of Information Circular 70-6R2, advance rulings will be given only in respect of proposed transactions. Advance rulings are not issued on transactions that are already completed or on series of transactions that are significantly advanced. We have enclosed a copy of Information Circular 70-6R2 and the related Special Release dated September 30, 1992 for future reference. We are, however, able to provide you with general comments which should be of assistance to your clients.

XXXXXXXXXX are a married couple experiencing fertility difficulties. The medical costs which they seek to claim as medical expenses have been summarized as "medical" (includes various medical services, procedures, and tests) as well as prescription costs and travel costs. While a detailed breakdown of costs paid to date does not seem to have been submitted, it appears that most or all of the costs are the result of the couple's involvement in the in vitro fertilization with cytoplasmic sperm injection (ICSI) program at XXXXXXXXXX We did receive a copy of the schedule of fees and charges for treatment from

XXXXXXXXXX

and the unwillingness of Blue Cross to provide coverage to any couple undergoing infertility treatments, that the couple's costs from the ICSI program must be borne by them personally. You have stated that XXXXXXXXXX is a public or licensed private hospital for purposes of the medical expense credit under subsection 118.2(1) of the Income Tax Act and for this reason you believe that your clients may claim the costs associated with the ICSI program.

As you are aware, paragraph 118.2(2)(a) of the Act provides that an amount paid to a medical practitioner, dentist or nurse or a public or licensed private hospital in respect of medical or dental services may qualify as a medical expense for purposes of the medical expense credit. Accordingly, to the extent that the expenses paid by either XXXXXXXXXX are described within these confines, they are eligible expenditures. We do not consider travel costs relating to the ICSI program to be in respect of medical services. However, an amount paid as a consultation fee or registration fee for an in vitro fertilization or ICSI program could be considered qualifying medical expenses if paid to "a medical practitioner, dentist or nurse or a public or licensed private hospital".

To the extent that amounts paid by your clients do not qualify under paragraph 118.2(2)(a) of the Act, paragraphs 118.2(2)(n) and 118.2(2)(o) may provide some relief. See paragraphs 60 and 62 of Interpretation Bulletin IT-519R.

Travel expenses are only a qualifying medical expense to the extent provided for in paragraphs 118.2(2)(f), (g) and (h) of the Act. See paragraphs 34 through 37 of Interpretation Bulletin IT-519R for a discussion of these issues.

We trust our comments will be of assistance to you.

Yours truly,

J.A. Szeszycki
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

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