With tax season just weeks away, now may be a good time to start gathering all those receipts from 2009 so that you are not caught scrambling at the last minute, especially when it comes to collecting medical expense receipts.
The tax rules permit you to claim a non-refundable credit for "eligible medical expenses" you incurred either for yourself, your partner or your kids under age 18.
To qualify, the service or item must be listed as an "eligible" medical expense under the Income Tax Act. Medical devices must be prescribed by a medical practitioner.
Earlier this year, the Canada Revenue Agency formally responded to a couple of taxpayer requests dealing with eligibilty of certain expenses for the medical expense tax credit (METC).
In the first case, a taxpayer asked whether the cost of installing an indoor swimming pool could qualify as a medical expense. The taxpayer's physician "prescribed the swimming pool" for the purpose of alleviating chronic pain and the taxpayer indicated that there would be "little to no other personal use of the swimming pool" by the individual's family.
Under the rules, in order to claim the METC for a mobility device, it must be "exclusively designed to assist an individual in walking where the individual has a mobility impairment." Since a swimming pool is not considered to be a device exclusively designed to assist an individual in walking, the CRA concluded that it doesn't qualify for the credit.
The Tax Act also allows certain renovation expenses to qualify for the medical expense credit if they permit an individual with a severe impairment to be mobile within their home. But two conditions must be satisfied: First, the renovations must not generally increase the value of the home; and second, they must not be renovations that would normally be incurred by someone without a mobility impairment.
Since an indoor swimming pool may increase the value of the home and swimming pools are normally built by individuals "for general health, fitness and entertainment reasons," the cost of such an installation would not qualify for the METC.
In another case, a taxpayer described that he was diagnosed by his doctor as having hypertension and high blood pressure. His doctor recommended that he undertake a supervised exercise regime with a personal trainer twice per week. The taxpayer wanted to know if he could claim the personal training sessions as a medical expense eligible for the credit. But medical expenses only include payments made to a medical practitioner, who is defined as a person authorized to practice a medical service "according to the laws of the jurisdiction in which the service is rendered."
The CRA responded that it was "unaware of any provincial legislation that authorizes and regulates personal trainers" and as a result, the payments do not qualify for the medical expense tax credit.