25 May 2011 External T.I. 2011-0403471E5 - METC - 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.

Principal Issues: Whether moving expenses can be claimed by the taxpayer as medical expenses for purposes of the medical expense tax credit.

Position: It is a question of fact.

Reasons: Insufficient information to determine if the taxpayer meets the requirements of paragraph 118.2(2)(l.5) of the Act.

XXXXXXXXXX
					2011-040347
					Linda Compton
May 25, 2011

Dear XXXXXXXXXX :

Re: Medical Expense Tax Credit - Moving Expenses

This is in response to your letter of April 10, 2011, inquiring about whether you can claim a deduction for moving expenses for purposes of the medical expenses tax credit ("METC"). You advise that you have been diagnosed with Emphysema and require constant monitoring and therapy by health care professionals.

Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of a request for an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, "Advanced Income Tax Rulings", dated May 17, 2002. This Information Circular and other Canada Revenue Agency ("CRA") publications can be accessed on the internet at http://www.cra-arc.gc.ca. Where the particular transactions are complete, the inquiry should be addressed to the relevant tax services office, a list of which is available on the "Contact Us" page of the CRA website. Although we cannot comment on your specific situation, we are prepared to provide the following comments in respect of the issues that you raised. Please note, however, that these comments are of a general nature only and are not binding on the CRA.

Section 118.2 of the Income Tax Act ("Act") provides rules for determining the amount that may be claimed as a tax credit in respect of medical expenses in computing the METC. Subsection 118.2(2) of the Act provides a list of expenditures that qualify as medical expenses. A person can claim qualifying medical expenses they pay in respect of themselves, their spouse or a person who is dependent on them for support.

Paragraph 118.2(2)(l.5) of the Act allows, as a medical expense, reasonable moving expenses (as defined in subsection 62(3) of the Act), up to a maximum of $2,000, to move an individual, who lacks normal physical development or has a severe and prolonged mobility impairment, to housing that is more accessible by the individualor in which the individual is more mobile or functional. 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. Based on the information provided in your letter, it is unclear whether you would meet the conditions of this provision of the Act.

We trust our comments will be of assistance.

Yours truly,

G. Moore
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch