Principal Issues: Whether an amount paid by the taxpayer for dental applicance designed to treat sleep apnea would qualify as a medical expense for purposes of calculating the medical expense tax credit.
Position: It is a question of fact based on the determination of whether the patient is suffering from a "severe chronic respiratory ailment" and whether the dental applicance was "designed exclusively for use by" such a patient for that ailment.
Reasons: The law.
XXXXXXXXXX 2011-042954 André Gallant
January 30, 2012
Dear XXXXXXXXXX :
Re: Medical expenses
We are writing in reply to your email dated November 28, 2011, wherein you enquire whether the cost of a dental applicance designed to treat sleep apnea would qualify as an eligible medical expense for the purposes of the medical expense tax credit ("METC").
It is our understanding that these applicances are custom-made, and can be used by patients with primary snoring or mild to moderate sleep apnea. If left untreated, sleep apnea can result, depending on the severity of the condition, in diseases such as high blood pressure, strokes and heart attacks. When the patient has moderate to severe sleep apnea, the patient is referred for an evaluation for a more invasive treatment, as opposed to the dental applicance: the Continuous Positive Airway Pressure (CPAP) machine.
Medical expenses which are eligible for the METC are limited to those described in subsection 118.2(2) of the Income Tax Act (the "Act"). If a particular expenditure is not described as an eligible medical expense in subsection 118.2(2) of the Act, or if the conditions under which the expenditure would qualify are not met, the expenditure does not qualify for purposes of the METC, even though the expenditure may have been incurred for medical reasons.
Under paragraph 118.2(2)(m) of the Act, an amount paid for a device or equipment may qualify as an eligible medical expense if certain conditions are met. Generally, to qualify, the device or equipment must be prescribed by a medical practitioner (which includes a doctor or a dentist), must be included in the list of qualifying devices or equipment described in section 5700 of the Income Tax Regulations (the "Regulations") and must meet such conditions as are prescribed by the Regulations as to its use or the reason for its acquisition.
Paragraph 5700(c) refers to a "device or equipment, ... designed exclusively for use by an individual suffering from a severe chronic respiratory ailment...".
It is a question of fact whether the patient is suffering from a "severe chronic respiratory ailment" and whether the dental applicance was "designed exclusively for use by" such a patient for that ailment.
Each case must be examined based on the facts and documents relating to a taxpayer's claim for the METC under paragraph 5700(c). In this regard, the professional opinion of the taxpayer's medical practitioner remains, in our view, the best evidence in determining whether an individual is suffering from a severe chronic respiratory ailment.
In regard to this particular case, we do not have sufficient information to determine whether the dental appliance in question meets all the above requirements.
We trust our comments will be of assistance to you.
Yours truly,
G. Moore
for Director
Business and Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch