Principal Issues: Whether photodynamic therapy to treat a medical condition called Rosacea qualifies as medical expense or would it be excluded as an eligible medical expense because it is cosmetic in nature?
Position: The cost of the photodynamic therapy qualifies as a medical expense in this case as it is incurred to treat a medical condition. In this case, a letter from the taxpayer's physician indicates that the taxpayer has severe Rosacea with symptoms such as lesions, scaly patches, facial redness, frequent flushing, bleeding, blemishes and highly sensitive skin. The physician's letter also indicates that it is a recommended procedure for the treatment and prevention of non-pigmented pre-cancers of the skin.
Reasons: Based on information provided, in this case, the therapy is not cosmetic in nature but is to treat a skin condition.
XXXXXXXXXX 2010-038383 J. Gibbons, CGA
December 14, 2010
Dear XXXXXXXXXX :
Re: Photodynamic therapy
We are replying to your letter dated September 7, 2010, concerning whether the costs incurred for photodynamic therapy ("PDT") qualify for the medical expense tax credit ("METC") under subsection 118.2(1) of the Income Tax Act (the "Act").
Your physician's letter indicates that the PDT is being undertaken as a result of being diagnosed with a skin condition called Rosacea. In your case, the medical condition causes persistent facial redness, frequent flushing, scaly patches, lesions, inflammation, blemishes, highly sensitive skin, and bleeding.
Our Comments
Cosmetic Procedures
Subsection 118.2(2.1) excludes from eligible medical exenses any amounts paid for medical or dental services, or any related expenses, provided purely for cosmetic purposes, unless the services are required for medical or reconstructive purposes. For example, surgical and non-surgical procedures purely aimed at enhancing one's appearance such as liposuction, hair replacement procedures, botulinum toxin injections, and teeth whitening would not qualify as an eligible medical expense. A cosmetic procedure will continue to qualify for the medical expense tax credit if it is required for medical or reconstructive purposes, such as surgery to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident or trauma, or a disfiguring disease. The CRA has posted to its website some examples of procedures that will generally be ineligible as medical expenses for purposes of the METC. This information can be found on the CRA website at: http://www.cra-arc.gc.ca/gncy/bdgt/2010/mdcl-eng.html.
Payments to Medical Practitioners and Hospitals
Amounts paid by an individual to a "medical practitioner" or to a "public or licensed private hospital" to obtain medical services are qualifying medical expenses for the METC pursuant to paragraph 118.2(2)(a) of the Act. The term "medical practitioner" includes a physician, dentist, pharmacist, nurse or optometrist who is authorized to practice the particular profession according to the laws of the jurisdiction in which the service is rendered, whereas "licensed private hospital" means licensed by the jurisdiction in which the hospital operates. A list of medical practitioners by province is listed on our website at http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns300-350/330/ampp-eng.html.
Notwithstanding the above, as indicated in paragraph 20 of IT-519R2, Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, it is our view that payments made to partnerships, societies and associations for medical services rendered by their employees or partners are qualifying medical expenses as long as the person who provided the service is a medical practitioner, dentist or nurse authorized to practice in accordance with the laws of the jurisdiction in which the service is rendered. IT-519R2 is available on our website at www.cra-arc.gc.ca.
Based on the information in your letter, it is our view that, in your case, the PDT is not cosmetic in nature and therefore, the cost of this therapy would qualify as a medical expense for purposes of the METC, providing the other requirements of paragraph 118.2(2)(a) are met.
We trust these 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