28 September 2004 External T.I. 2004-0075161E5 - Medical Expense

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 the travel costs in question qualify for the medical expense tax credit.

Position: No

Reasons: Legislation

XXXXXXXXXX 2004-007516
Shaun Harkin, CMA
September 28, 2004

Dear XXXXXXXXXX:

Re: Technical Interpretation Request: Medical Expense

We are writing in reply to your letter of April 15, 2004, requesting our view on whether the travel costs you incurred qualify for the medical expense tax credit.

In your letter, you explained that while on vacation you became ill, were hospitalized and had surgery. Following your period of hospitalization you had to fly back home immediately. It is your view that the incremental cost of this flight home should qualify for the medical expense credit.

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. Subsection 118.2(2) of the Act contains a list of expenditures that qualify as medical expenses. Those parts of subsection 118.2(2) that are relevant to your situation are discussed below.

An amount paid to a person engaged in the business of providing transportation services to transport an individual not less than 40 kilometres from the locality where the individual resides to a place where medical services are received may qualify as a medical expense under paragraph 118.2(2)(g) of the Act. Similarly, other travel expenses may qualify as medical expenses under paragraph 118.2(2)(h) of the Act if the individual travels not less than 80 kilometres from the locality where the individual dwells to a place where medical services are received.

An individual is entitled to claim transportation and travel expenses under paragraphs 118.2(2)(g) and (h) only if the following requirements are met:

(i) substantially equivalent medical services were not available in the individual's locality,

(ii) a reasonably direct travelling route was taken by the individual, and

(iii) the individual travelled to the particular place to obtain medical services for himself or herself and it is reasonable, having regard to the circumstances, for the individual to have travelled to that place for medical services.

While section 118.2 of the Act provides some relief in recognizing that travel expenses may be incurred in relation to necessary medical attention, such relief is only offered in limited circumstances. Unfortunately, the travel expenses described in your letter do not appear to meet the eligibility requirements set out in the section.

The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R5, the above comments do not constitute an income tax ruling and accordingly are not binding on the Canada Revenue Agency. Our practice is to make this disclaimer in all instances in which we provide an opinion.

We regret our response could not be more favourable.

Yours truly,

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

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