Principal Issues: [TaxInterpretations translation] Are personal expenses paid in 2011 eligible for the medical expense tax credit for purposes of subsection 118.2(1)? Specifically, are the personal expenses incurred in the course of surgery to correct a malformation related to a congenital anomaly eligible?
Position: General comments.
Reasons: It is a question of fact to determine whether a surgical service or procedure has been provided purely for cosmetic purposes or has been required for medical or reconstructive purposes.
XXXXXXXXXX 2011-041481 Danielle Bouffard November 17, 2011
Dear Madam,
Subject: Eligible Medical Expenses
This is in response to your letter of May 19, 2011 asking whether amounts paid in 2011 for surgery qualify as eligible medical expenses for the purposes of subsection 118.2(2) of the Income Tax Act.
Unless otherwise indicated, all statutory references below are to the provisions of the Income Tax Act, R.S.C. 1985 (5th Supplement), c.1, as amended (the “Act”)
You stated having undergone surgery that reduced the right breast. The costs of that mammoplasty were covered by the provincial health care plan. As part of that surgery, there was a mammoplasty of the left breast for which you were billed (the "personal expenses").
Questions
Are the personal expenses paid in 2011 eligible for the medical expense tax credit for purposes of subsection 118.2(1)? Specifically, you wish the CRA to confirm that the personal expenses you incurred in the context of the surgery were to correct a malformation related to a congenital anomaly.
Our Comments
Section 118.2 provides that an individual may claim a non-refundable tax credit for eligible medical expenses paid by the individual, for example, for the individual, the individual’s spouse or common-law partner or for a dependent. Paragraph 118.2(2)(a) provides that an individual's medical expenses are expenses paid to a medical practitioner, dentist or nurse or a public or licensed private hospital in respect of medical or dental services provided inter alia to the individual in the taxation year in which the expenses were incurred.
As provided for in subsection 118.2(2.1), the medical expenses referred to in subsection 118.2(2) do not include amounts paid for medical or dental services, nor any related expenses, provided purely for cosmetic purposes, unless necessary for medical or reconstructive purposes.
A list of ineligible medical expenses is available on the CRA's website at http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns / lns30 .... You referred to the following passage that discusses expenses incurred for cosmetic surgeries:
"surgeries for purely cosmetic purposes - the costs of procedures for purely cosmetic purposes, including any related services and other expenses such as travel, incurred after March 4, 2010, are not eligible for the medical expense tax credit. Surgical and non-surgical procedures purely aimed at enhancing one's appearance are not eligible. For example, the costs incurred for the following procedures are not eligible:
- liposuction;
- hair replacement procedures;
- Botox injections;
- teeth whitening.
Cosmetic procedures, including those stated above, may be eligible for the Medical Expense Tax Credit if they are necessary for medical or reconstructive purposes, such as surgery to address a deformity related to a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease.”
Finally, examples of cosmetic surgery expenses that continue to qualify for the medical expense tax credit are also available on the CRA's website at: http://www.cra-arc.gc. AC / gncy / bdgt / 2010 / MDCL-eng.html. Examples include breast implants and related reconstructive procedures after mastectomy and breast reduction to reduce back and shoulder pain.
It is a question of fact whether in the course of a surgical procedure a medical service or services have been provided purely for cosmetic purposes or have been required for medical or reconstructive purposes. That determination in the context of a particular situation must be based on all relevant facts and documents. Those documents may include the opinion of the qualified practitioner who rendered the medical services in the course of the surgery and in which is provided a detailed description of the nature and purpose of the medical service(s) rendered for which you had to pay a fee.
We hope that these comments are of assistance.
Best regards,
François Bordeleau, Advocate
Manager
Business and Partnerships Section
Income Tax Rulings Directorate