28 November 1998 External T.I. 9828115 - MEDICAL AND MOVING 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 Department.

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

Principal Issues: An elderly taxpayer with a medical condition called polymyalsia could no longer look after her daily personal needs and therefore moved from Nova Scotia to Alberta to live with her daughter. Are the moving expenses she incurred allowable as:

1. moving expenses under section 62 of the Act, or
2. medical expenses under paragraph 118.2(2)(l.5) of the Act

Position:

1. No. Not allowable as moving expenses under section 62 since the expenses do not appear to have been incurred because the individual moved to commence carrying on a business or to be employed or to be a student in full-time attendance at a university, college, or post-secondary educational institution.

2. Question of fact but moving expenses may be allowable under paragraph 118.2(2)(l.5) if the conditions of that paragraph are met.

Reasons: See 9724318, IT-178R3 and IT-519R2.

XXXXXXXXXX 982811
G. Moore
November 30, 1998

Dear XXXXXXXXXX:

Re: Moving Expenses

This is in reply to your letter of October 19, 1998, regarding moving expenses.

In your letter, you indicate that due to your physical condition (polymyalsia), you became unable to care for yourself in your home. You also indicate that you could no longer cook your own meals, look after personal hygiene, shopping, appointments, etc. As a result, rather than move into a nursing home, you chose to move in with your daughter in Alberta. Your daughter looks after your personal needs such as bathing, dressing and taking you to appointments. You are enquiring if the moving expenses you incurred, such as the cost of a moving van and air fare, in respect of your move from Nova Scotia to Alberta would qualify for a tax credit on your 1998 income tax return.

Our Comments

Subsection 62(1) of the Income Tax Act (the “Act”) provides that certain moving expenses incurred by an individual are deductible when calculating income for the year. The conditions and limitations in the Act regarding the moving expenses deduction are explained in the enclosed copy of Interpretation Bulletin IT-178R3, Moving Expenses. An individual who changes residences to commence employment at a new work location, commence carrying on a business at a new work location, or commence full-time attendance at a post-secondary educational institution may be able to deduct eligible moving expenses incurred in moving from the old residence to the new residence provided the move results in the individual living at least 40 kilometres closer to the new work location or educational institution.

Paragraph 118.2(2)(l.5) of the Act provides a medical expense tax credit in respect of medical expenses paid for reasonable moving expenses of a patient who lacks normal physical development or has a severe and prolonged mobility impairment. The expenses have to be incurred for the purpose of the patient’s move to a dwelling that is more accessible by the patient or in which the patient is more mobile or functional, and the total expenses claimed under paragraph 118.2(2)(l.5) in respect of the move cannot exceed $2,000. For example, an individual with a severe and prolonged mobility impairment who lived in a 2-storey house and moved to a bungalow would generally be entitled to a tax credit because the individual is more mobile in the new dwelling. Another example would be of an individual with a severe and prolonged mobility impairment who lived in a dwelling with a flight of stairs at the entrance and then moves to a dwelling with no stairs or a ramp at the entrance so that the new dwelling is more accessible to the individual than the old dwelling.

In your letter, you indicate that the reason for your move to your daughter’s house in Alberta was that you were no longer able to cook your own meals, look after personal hygiene, shopping or appointments. Since it appears that the reason for your move was not to commence carrying on a business or employment at a new work location or begin full-time attendance at a university, college or other post-secondary educational institution, you would not be entitled to deduct moving expenses under section 62 of the Act in respect of your move. However, if you lack normal physical development or you have a severe and prolonged mobility impairment and your moving expenses were incurred for the purpose of moving to a dwelling that is more accessible to you or in which you are more mobile or functional, then your moving expenses (as defined in subsection 62(3) of the Act), up to a maximum of $2,000, may be allowable as a medical expense on your income tax return. Paragraph 12 of IT-178R3 lists eligible moving expenses, which includes travelling costs and transportation costs for household effects.

We trust our comments will be of assistance to you.

Yours truly,

J. Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch