29 September 2003 External T.I. 2003-0035715 - 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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues: Whether costs of in vitro fertilization (including freezing, thawing of sperm and transfer of frozen embryo), qualify as medical expenses under subsection 118.2(2) of the Act.

Position: The expenses would qualify if paid to a medical practitioner or to a public or licensed private hospital

Reasons: Paragraph 118.2(2)(a)

							Lena Holloway, CA
XXXXXXXXXX 						(613) 957-2104
							2003-003571
September 29, 2003

Dear XXXXXXXXXX:

Re: Medical Expense Tax Credit

We are replying to your letter of August 18, 2003 regarding whether amounts paid to facilitate in vitro fertilization ("IVF") would qualify as medical expenses eligible for the medical expense tax credit. In particular your letter listed the following costs for our consideration:

• Sperm freezing - initial process, preparation and annual storage
• Embryo freezing - initial process, preparation and annual storage
• Sperm thawing
• Embryo thawing
• Transfer of frozen embryo

Your letter also referred us to the web site for XXXXXXXXXX for additional information on the procedures mentioned above and acknowledged that you have reviewed Interpretation Bulletin IT-519R2.

Our Comments

Written confirmation of the tax consequences that apply to a particular fact situation is given by this directorate only in the context of an advance ruling request submitted in the manner set out in Information Circular 70-6R5. However, we are prepared to provide the following general comments.

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. Under paragraph 118.2(2)(a) of the Act, qualifying medical expenses include an amount paid by an individual to a medical practitioner or a public or licensed private hospital in respect of medical services provided to the individual, the individual's spouse or common law partner, or to the individual's dependant.

In our view, the above-mentioned services 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 for the medical expense tax credit.

We trust our comments will be of some assistance.

Yours truly,

Daryl Boychuk, LL.B
for Director
Business and Partnerships Division
Income Tax Rulings Directorate