Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: 1) Whether the cost of a close caption device and related monthly costs qualify as medical expenses. 2) Whether the cost of a computer and speech recognition software for use by an individual with partial paralysis qualifies as a medical expense.
Position: 1) The cost of the closed caption device qualifies as a medical expense, provided that it is prescribed by a medical practitioner. In situations where a service provider cost is incurred to render the device operational, we would consider that cost to be a medical expense; 2) The cost of the computer and speech recognition software does not qualify as a medical expense.
Reasons: The provisions of section 118.2 of the Act.
January 27, 2003
Joy Curtis HEADQUARTERS T1 Client Services Bob Naufal, CMA Enquiries and Adjustments Division (613) 957-2744 Winnipeg Tax Centre 2002-017745
Qualifying Medical Expenses
We are writing in response to your query regarding qualifying medical expenses. Specifically, you asked us:
1. Whether the cost of a "closed caption" device used to decode and display dialogue signals, and related monthly costs from the server to allow the captioner to operate, qualify as medical expenses?
2. Whether the cost of a new computer and the cost of the "Dragon Naturally Speaking" software program (the "Software") used by a student who, by reason of partial paralysis, is unable to use his dominant hand for writing or typing, qualify as medical expenses?
Our Comments
Subsection 118.2(2) of the Income Tax Act (the "Act") provides a list of expenditures that qualify as medical expenses. Under paragraph 118.2(2)(m) of the Act, a payment in respect of prescribed medical devices and equipment may qualify as a medical expense if certain conditions are met. Generally, to qualify, the device or equipment must be prescribed by a medical practitioner and included in the list of qualifying medical devices or equipment described in section 5700 of the Income Tax Regulations (the "Regulations").
Closed Caption Devices
Section 5700(q) of the Regulations describes a device to decode special television signals to permit the audio portions of the signal to be visually displayed. Accordingly, in the first situation described above, the cost of a closed-caption device would qualify as a medical expense provided that the device is prescribed by a medical practitioner. In addition, in situations where a monthly service provider fee is required to render the device operational in terms of providing the necessary captioning, we would consider the monthly charge from the service provider as a qualifying medical expense provided that the cost of the closed-caption device is a qualifying medical expense.
Computer and Software
The cost of certain electronic devices such as large print-on-screen devices to allow blind persons to operate a computer, or a talking textbook for use by an individual enrolled at an educational institution with a perceptual disability, may qualify as a medical expense. However, a new computer and the Software described above are not listed in section 5700 of the Regulations and, therefore, the costs associated with acquiring them would not qualify as a medical expense.
We trust our comments to be of some assistance.
D. Boychuk, LL.B
for Director
Business and Partnerships Division
Income Tax Rulings Directorate
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