6 January 2004 External T.I. 2003-0046745 - MEDICAL EXPENSE CARE IN SCHOOL

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 a school which provides equipment and personnel for the remediation of learning disabilities could receive approval as a school to which 118.2(2)(e) would automatically apply to so that a payment to it would qualify as a medical expense.

Position:

The Act does not allow for the general approval of a school but rather it is the patient that claims the medical expense if all requirements are met.

Reasons:

Whether 118.2(2)(e) applies is fact dependant on whether the individual is appropriately certified as requiring the particular school.

Lena Holloway, CA
XXXXXXXXXX (613) 957-2104
2003-004674
January 6, 2004

Dear XXXXXXXXXX:

We are writing in response to your letter dated October 28, 2003, wherein you requested that XXXXXXXXXX (the "Institution"), a Ministry of Education approved school, receive "special consideration to be approved as an authorized school that provides medical equipment and personnel for the remediation of learning disabilities".

Your letter explained that the Institution provides neuro-cognitive programs that are developed or statistically validated by neurologists and other health care professionals in the field of medicine and education. The overview of the programs offered at the Institution outlined that these programs are highly specialized, often remedial in nature and require specialized staff and equipment. In light of this, you requested that the Canada Customs and Revenue Agency ("CCRA") certify that amounts paid to the Institution qualify as medical expenses for income tax purposes.

Written confirmation of the tax implications of a cost that a particular taxpayer will incur may only be given by this Directorate in the context of an application for an Advance Tax Ruling. However, we are prepared to provide the following general comments, which may be of assistance.

Our 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)(e) of the Act, qualifying medical expenses include amounts paid for the care, or the care and training at a school, institution or other place, of an individual, who has been certified in writing by an appropriately qualified person to be a person who, by reason of a physical or mental handicap, requires the equipment, facilities or personnel specifically provided by that place.

As noted in paragraph 29 of Interpretation Bulletin IT-519R2 Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, it is our view that an "appropriately qualified person" includes a medical practitioner such as a doctor or a psychologist, as well as any other person who has been given the required certification powers under provincial or federal law. In addition, the certification by the qualified person must either be specific as to the school, institution or other place which provides the specialized equipment, facilities or personnel, or be specific as to the type of equipment, facilities or personnel needed to provide the care and training of a person with a particular type of physical or mental impairment.

The CCRA does not certify particular institutions as qualifying institutions for the purpose of paragraph 118.2(2)(e) of the Act so as to allow all amounts paid to the institution to qualify as medical expenses for income tax purposes. Rather the certification is determined on an individual basis, and must therefore be obtained in respect of each person suffering from a particular mental or physical impairment. This certification should be obtained with respect to an individual prior to being enrolled as a student at the Institution. However, we may be prepared to accept a certification made after placement if all the above-noted requirements are satisfied.

We trust our comments will be of some assistance. Please contact us if you have any questions concerning our response.

Yours truly,

Wayne Antle, CGA
for Director
Business and Partnerships Division
Income Tax Rulings Directorate

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