Principal Issues: Whether a taxpayer's contribution to a long-term health care insurance plan qualifies for the medical expense tax credit.
Position: It depends on whether the amounts were paid to a "private health services plan" as defined in subsection 248(1) of the Act.
Reasons: Paragraph 118.2(2)(q)
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Dear XXXXXXXXXX:
The office of your member of Parliament, XXXXXXXXXX, sent me a copy of your correspondence, which I received on February 27, 2013, about the medical expense tax credit (METC). You want to know whether your contribution to a long-term health care insurance plan qualifies for the METC.
Contributions made for coverage under a long-term health care insurance plan may qualify as medical expenses under the Income Tax Act if they were paid as a premium, contribution, or other type of payment to a private health services plan as defined in the Act.
You will find general information about private health services plans in Interpretation Bulletin IT-339R2, Meaning of private health services plan [1988 and subsequent taxation years], available on the Canada Revenue Agency (CRA) Web site at www.cra.gc.ca/E/pub/tp/it3339r2. This bulletin explains that a plan is considered a private health services plan only if it limits coverage to hospital care, hospital expenses, medical care, or medical expenses that normally qualify as medical expenses under the Act. Therefore, if a plan includes benefits in addition to medical expense payments, it would not meet the definition of a private health services plan.
Also, Interpretation Bulletin IT-519R2, Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, available on the CRA Web site at www.cra.gc.ca/E/pub/tp /it519r2-consolid, contains more information on eligible medical expenses. Paragraph 64 deals specifically with premiums paid by an individual to a private health services plan.
I trust the information I have provided is helpful.
Yours sincerely,
Gail Shea, P.C., M.P.
Minister of National Revenue
c.c.: XXXXXXXXXX
Ananthy Mahendran
(905) 721-5204
2013-048071