Principal Issues: Whether the cost of medical malpractice insurance that an employee is required to pay by virtue of the conditions of his or her employment, is deductible under subsection 8(1) of the Income Tax Act?
Position: Yes.
Reasons: Consistent with longstanding position of the CRA.
Randy Hewlett XXXXXXXXXX 613-957-2049 2005-016364 April 6, 2006
Dear XXXXXXXXXX:
Re: Deductibility of Malpractice Insurance Premiums - Employed Residents
Further to your letter of December 22, 2005 and our conversation March 31, 2006 (Hewlett/XXXXXXXXXX), we are writing to confirm that the cost of medical malpractice insurance that an employee is required to pay by virtue of the conditions of his or her employment, is deductible under subsection 8(1) of the Income Tax Act provided the employer certifies the employee's requirement to pay the expense on the form T2200.
Should you have any further questions please feel free to contact the undersigned at the telephone number indicated above.
Yours truly,
Randy Hewlett
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch