Principal Issues: Whether moving expenses can be claimed in computing income taxes.
Position: Certain moving expenses may be claimed in computing medical expense tax credit if the individual has a severe and prolonged mobility impairment, if new dwelling is more accessible or if individual is more mobile or functional within new dwelling. Expenses must be evidenced by receipt.
Reasons: Paragraph 118.2(2)(l.5).
XXXXXXXXXX 2006-016739
April 11, 2006
Dear XXXXXXXXXX:
Re: Moving Expenses
This is in reply to your letter of January 12, 2006 in which you ask whether the moving expenses you incurred to move to your current home may be claimed for income tax purposes. You advise that your wife has Alzheimer's disease and you have multiple sclerosis and you needed to move because of your medical conditions. You have asked if we might write a letter authorizing you to claim, in computing your income taxes, the expenses you incurred in making this move.
Unfortunately, it is not clear from your letter whether your moving expenses can be claimed in computing your income taxes. However, we do have some comments which might help you decide whether the amounts you paid can be claimed when you file your tax return.
Under the Income Tax Act ("the Act"), individuals can claim certain expenses in computing what is commonly known as the "medical expense tax credit". Subsection 118.2(2) of the Act provides a list of the expenses that may be claimed as qualifying medical expenses. A person can claim qualifying medical expenses they pay in respect of themselves, their spouse or a person who is dependant on them for support.
One of the items on the list of qualifying medical expenses is an amount paid for "reasonable moving expenses" for a person who has a severe and prolonged mobility impairment, where the move is to a dwelling that is more accessible by that person or in which the person is more mobile or functional. This item is found in paragraph 118.2(2)(l.5) of the Act. As you have multiple sclerosis, your moving expenses may fall within this paragraph if you have a severe and prolonged mobility impairment, and if your new dwelling is more accessible or you are more mobile or functional within your new dwelling.
If you think this is the case, the type of expenses that may be claimed include the expenses described in paragraphs 12 to 17 of Interpretation Bulletin IT-178R3 "Moving Expenses", a copy of which we have attached for your information. The total moving expenses that can be claimed as medical expenses by all persons in respect of the same move cannot exceed $2000.
You have indicated in your letter that you aren't sure that you can document all of your moving expenses. This may be a problem for you if you want to claim those amounts as medical expenses, because the Act requires that medical expenses be "evidenced by receipts". If you file a paper return, the instructions for preparing your tax return indicate that you must attach your receipts to your return. Receipts must show the name of the person or company to whom the amount was paid. If you are filing electronically, you are asked to keep a copy of your receipts so that you can present them if asked.
If you have any questions about this, please feel free to call me at (613) 957-2141.
Sincerely,
Robin Maley
Manager
Partnerships and Health Section
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch