Principal Issues: Where a taxpayer is required to travel a minimum of 80 kilometres in order to obtain medical treatment, would the following expenses be eligible as medical expenses under paragraph 118.2(2)(h): (a) parking expenses; (b) alcohol purchased with a meal
Position: Question of fact in each case.
Reasons: Legislation
XXXXXXXXXX 2009-033776 Katharine Skulski December 22, 2009
Dear XXXXXXXXXX :
Re: Travel Expenses for Medical Care
This is in response to your email of August 20, 2009 inquiring about whether travel expenses incurred in connection with obtaining medical services would be eligible for the medical expense credit set out in paragraph 118.2(2)(h) of the Income Tax Act (the "Act").
The particular situation outlined in your letter appears to relate to a factual one, involving one or more specific taxpayers. As explained in Information Circular 70-6R5, it is not this Directorate's practice to comment on transactions involving specific taxpayers other than in the form of an Advance Income Tax Ruling. An Advance Income Tax Ruling is not issued where a transaction has completed or is significantly advanced. In those instances you should submit all relevant facts and documentation to the appropriate Tax Services Office for their views. However, we are prepared to offer the following general comments which may be of assistance.
An amount paid to a person engaged in the business of providing transportation services to transport an individual not less than 40 kilometres from the locality where the individual resides to a place where medical services are received may qualify as a medical expense under paragraph 118.2(2)(g) of the Act. Other reasonable travel expenses (including vehicle, meals and accommodations) while traveling to a hospital or medical centre may qualify as medical expenses under paragraph 118.2(2)(h) of the Act if the individual travels not less than 80 kilometres from the locality where the individual dwells to a place where medical services are received. If you have to travel more than 80 kilometres (one way) for medical treatment, in addition to travel costs, you may be able to claim the cost of your meals and accommodations. Travel and transportation and travel expenses for an accompanying individual may qualify under paragraphs 118.2(2)(g) and (h) of the Act, but only if the patient has been certified by a medical practitioner as being incapable of traveling alone.
An individual is entitled to claim transportation and travel expenses under paragraphs 118.2(2)(g) and (h) provided the following requirements are met:
- substantially equivalent medical services are not available in that locality;
- the route traveled by the patient is, having regard to the circumstances, a reasonably direct route; and
- the patient travels to that place to obtain medical services for him/herself and it is reasonable, having regard to the circumstances, for the patient to travel that that place to obtain those services.
It is the CRA's position that expenses meeting the criteria set out above are generally allowed to the extent that they are reasonable and there is no reason to preclude their deduction (for example, if an insurance company were to reimburse the expense). There is no definition of "reasonable" in the Act with respect to reasonable travel expenses.
Where a taxpayer is required to travel no less than 80 kilometres (one way) in order to obtain medical services and incurs expenses for parking, such as at a hotel while en route to the hospital or medical facility, such expenses may be eligible for the medical expense tax credit. However, expenses incurred for parking at the hospital or medical centre are not eligible as the traveling will have been completed by the time that such expenses are incurred.
You have asked whether the cost of alcohol qualifies as a medical expense. Generally, the cost of beverages, as part of a meal, would qualify, as long as the overall cost is reasonable. Whether or not alcohol that is purchased and consumed as part of a meal is a reasonable expense and therefore eligible for the medical expense tax credit, is a question of fact.
We trust that 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