IN THIS ISSUE
FEBRUARY 18, 2003 FEDERAL BUDGET
DID YOU KNOW...
IN THIS ISSUE
MEDICAL EXPENSES - RETIREMENT HOMES
A CCRA spokesperson noted that CCRA will now permit a medical expense for the “attendant care” portion of the retirement residence rent paid by persons eligible to claim the “disability amount” - (requires a doctor’s certificate on Form T2201).
The operator of the “retirement residence” should provide a receipt showing the “attendant care” portion of the rent.
This should not affect people in “nursing homes” as they always have been entitled to claim the nursing home fees as a medical expense.
MEDICAL EXPENSES - RENOVATIONS
In a March 11, 2003 Technical Interpretation, CCRA note that reasonable expenses to renovate or alter a dwelling of an individual who lacks normal physical development, or has a severe and prolonged mobility impairment, to enable the person to gain access to, or be mobile or functional within, the dwelling, would be a medical expense.
Also, in a January 7, 2003 Tax Court of Canada case, the taxpayer had a four year old son who suffered from severe
allergies. Therefore, a doctor made a number of recommendations whereby the taxpayer replaced the carpets with hardwood floors at a cost of $8,179. The Court permitted $6,000 as a medical expense as being a reasonable average cost to replace the rugs.
MEDICAL EXPENSES - SUPPLEMENTS AND ORGANIC FOOD
In a July 11, 2002 Tax Court of Canada case, the Court noted that prescriptions must be “recorded by a pharmacist” to qualify as a medical expense. The Judge commented: “whatever that accomplishes, I do not know, but the legislation is clear that they must be recorded by a pharmacist”.
It appears that the Court is suggesting that simply “recording by a pharmacist” may allow a medical expense for necessary prescribed drugs and medicaments.
MEDICAL EXPENSES - ACNE FACIAL TREATMENTS
In a December 11, 2002 Technical Interpretation, CCRA notes that where a taxpayer makes a payment to an employee of a dermatologist for facial treatments to correct acne problems, the payments would likely be medical expenses on the basis that a dermatologist is a “medical practitioner”.
DISABILITY TAX CREDIT (DTC) - ORTHOSIS
In a May 9, 2002 Tax Court of Canada case, the taxpayer suffered from poliomyelitis and required the use of an orthosis to get around. The Court noted that one person may walk fairly well with an artificial leg (therefore no disability tax credit), while others might have a great deal of difficulty. It depends on the person’s own muscle strength and the type of prosthesis or orthosis required.
In this case, the type of orthosis required because of the existing but undeveloped limb still led to an inordinate amount of effort to walk. Therefore, the DTC was allowed.
In some Canadian cities, including Calgary, CCRA are carrying out projects with respect to unreported tips in the hospitality industry. We understand that CCRA may just go back one year.
On March 11, 2003 the Federal Court of Appeal unanimously found that the receipt of a non-competition amount is tax-free.
The Court noted that:
2003 SECOND QUARTERISSUE NO. 62PAGE 1
Tax Tips & Traps