Tax season is about to begin, so if you’ve got some extra time this (long) weekend, you may want to start gathering all those receipts from 2015 that you’re going to need to begin the timely preparation of your return. Among the ones you may want to start tracking down are receipts for eligible medical expenses.
For the 2015 tax year, valid medical expenses qualify for a 15 per cent federal medical expense tax credit (METC) as well as a provincial credit, provided they exceed a minimum threshold equal to the lesser of three per cent of your net income or $2,208.
The tax rules allow you to can claim the METC for expenses you incurred for yourself, your spouse (or partner) and your kids under age 18. To qualify, the medical service or item must be specifically listed as an “eligible” medical expense under the Income Tax Act. Medical devices must be prescribed by a medical practitioner.
The Canada Revenue Agency recently published its response to a taxpayer’s query as to whether the cost of a Segway — the two-wheeled, motorized transportation device with handlebars — would be an eligible expense for purposes of claiming the METC.
The taxpayer has indicated that he has a disease “that creates profound overall weakness after walking any great distance” and that “(a) Segway would provide him with mobility and access to areas where scooters can’t go.”
The CRA acknowledged that the list of eligible medical items whose costs are eligible for the METC include a wheelchair. The CRA was of the opinion that a “wheelchair” can include a standing wheelchair, which is a medical device designed specifically for individuals with severe mobility impairments and is meant to be used as a wheelchair, except that the individual is standing instead of sitting. The CRA also acknowledged that an electric scooter could qualify as a wheelchair, but only if it’s acquired “in substitution for a conventional wheelchair and is used to improve mobility.”
The CRA felt that a Segway is “not sufficiently similar to a standing wheelchair to be considered a wheelchair within the ordinary meaning of the term and the cost will not be an eligible expense.”
In addition to allowing a wheelchair as a medical expense, the Tax Act also permits the cost of a “device that is exclusively designed to assist an individual in walking where the individual has a mobility impairment” as well as “power-operated … transportation equipment designed exclusively for use by, or for, a disabled individual to allow the individual access to different areas of a building” to be claimed as valid medical expenses.
But, again, the CRA’s position was that since a Segway is designed to be a “general transportation device … not ‘exclusively designed’ for individuals with mobility impairments,” its cost would not qualify for the METC. The CRA cited the frequent examples of Segway use by postal delivery workers and police officers.
If you want to be sure your medical expense is valid before you claim it, check out the CRA’s list of 134 different medical expenses on its website under the heading, “Which medical expenses can you claim?”