24 December 2015 Internal T.I. 2015-0612331I7 - Oocyte preservation

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: Are amounts paid for oocyte preservation, thawing of eggs and embryos and sperm freezing, when medically indicated, eligible medical expenses?

Position: Amounts paid for the cost of a stimulating and harvesting cycle, the freezing and thawing of eggs or embryos and sperm freezing, when medically indicated (such as, for the medical condition of infertility or medically advisable because of impeding medical treatments, such as, chemotherapy for cancer, that is likely to have a direct significant negative effect on reproduction functions) would qualify as eligible medical expenses if the requirements of 118.2(2)(a) and 118.2(2)(o) are otherwise met.

Reasons: The requirements of paragraphs 118.2(2)(a) or 118.2(2)(o) must be met.

December 24, 2015

Individual Returns Directorate HEADQUARTERS
Business and Employment Income Tax Rulings
Attention: Sheila Bernard, Manager Division Directorate
Legislation Section Nancy Shea-Farrow
Program Support and Services Division 905-721-5099

2015-061233

Medical Expense Tax Credit and Oocyte Preservation

This is in response to your correspondence of October 6, 2015, asking for our view on whether certain costs paid to a fertility clinic are eligible medical expenses for the purpose of the medical expense tax credit (“METC”) in subsection 118.2(2) of the Income Tax Act (the “Act”).

You would like to know if payments for the following (collectively, the “Procedures”) would be eligible medical expenses for the METC in situations where it is medically advisable for the patient to undergo the Procedures:

i) an oocyte preservation cycle to preserve the eggs of a woman [We understand that this consists of stimulating and harvesting cycles and actual freezing of the eggs or embryos (cryopreservation)]:

ii) thawing of eggs or embryos; and

iii) sperm freezing (cryopreservation).

Our understanding is that the Procedures are medically advisable when, for example, a patient with cancer is to undergo an impending medical treatment (e.g., chemotherapy) that is likely to have a direct, significant, negative effect on reproductive functions.

Our Comments

Paragraph 118.2(2)(a) of the Act allows, as an eligible medical expense of an individual, an amount paid to a medical practitioner, dentist or nurse or a public or licensed private hospital for medical or dental services provided to a patient. Generally, a “licensed private hospital” means a hospital licensed under the laws of the jurisdiction in which it operates. Medical services are diagnostic, therapeutic or rehabilitative services that are performed by a medical practitioner acting within the scope of his or her professional training. Generally, payments to medical practitioners are considered eligible medical expenses when they are paid for medical services or procedures that relate to existing illnesses or conditions of the patient. The amount paid by an individual has to be in respect of medical services provided to a patient who is the individual, the individual’s spouse or common-law partner, or certain dependants of the individual. The term “medical practitioner” encompasses a broad range of individuals in the medical profession including a medical doctor, pharmacist or nurse. For a medical service rendered to an individual, a reference to a medical practitioner is a reference to a person who is authorized to practice in the stated profession according to the laws of the jurisdiction in which the service is rendered. Paragraphs 1.20 - 1.23 of Income Tax Folio S1-F1-C1, Medical Expense Tax Credit (Folio) provide additional information regarding who is a medical practitioner for the purpose of the METC.

As described in paragraph 1.28 of the Folio, payments made to corporations, partnerships, societies, and associations for services rendered by their employees or partners are eligible medical expenses only where the person who provided the service is a medical practitioner and the service provided is a medical service.

Pursuant to paragraph 118.2(2)(o) of the Act, eligible medical expenses also include amounts paid:

• for a laboratory, radiological or other diagnostic procedure or service together with necessary interpretations;
• for maintaining health, preventing disease or assisting in the diagnosis or treatment of any injury, illness or disability;
• for the patient; and
• as prescribed by a medical practitioner.

The expenditures must satisfy all four conditions in order to be eligible under paragraph 118.2(2)(o) of the Act.

In our view, amounts paid for the cost of the Procedures when medically indicated (such as for the medical condition of infertility), or medically advisable because of impending medical treatments (such as when a patient is to undergo chemotherapy for cancer that is likely to have a direct, significant, negative effect on reproductive functions) would be considered medical services or laboratory, radiological or other diagnostic procedures or services, as applicable. To clarify, in our view, in the situations described, the Procedures are undertaken to treat an existing illness or condition of the patient or to maintain health or assist in the diagnosis or treatment of an injury, illness or disability.

Therefore, in the situations described, as long as all the requirements of either paragraphs 118.2(2)(a) or 118.2(2)(o) of the Act are met, the amount paid for the Procedures would qualify as eligible medical expenses for the METC.

We trust our comments will be of assistance.

Yours truly,

Pamela Burnley, CPA, CA
Manager, Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate