Alberta taxpayer tries to claim parking costs as a medical expense

Article content material

It’s too early to start out submitting your 2022 non-public tax go back — digital submitting of T1 returns simplest opens on Feb. 20 — however now’s the easiest time to begin collecting the receipts you’ll want, together with the ones associated with clinical bills in case you’re hoping to assert the clinical expense tax credit score (METC).

Article content material

The METC is a non-refundable credit score price 15 consistent with cent federally, with every province and territory providing its personal further credit score. Federally, you’ll be able to declare an METC equipped your overall circle of relatives’s clinical bills exceed a minimal threshold equivalent to the lesser of 3 consistent with cent of your internet source of revenue or $2,635 (for 2023). The provincial/territorial minimal source of revenue thresholds range fairly.

Article content material

The tax regulations help you declare an METC for bills you incurred for your self, your partner or spouse, and your youngsters underneath age 18. To qualify, the clinical carrier or merchandise will have to be particularly indexed as an “eligible” clinical expense underneath the Source of revenue Tax Act. In sure restricted scenarios, you might also be entitled to deduct the price of “affordable shuttle bills” equivalent to transportation, foods and lodging if you must shuttle to procure those clinical services and products.

Article content material

However so as to deduct transportation as a clinical expense, the clinical services and products will have to no longer be to be had in the local people, where of shuttle will have to be positioned greater than 40 kilometres from the affected person’s house (80 km if you wish to deduct shuttle bills instead of transportation), the path taken will have to be an instantaneous one and “it will have to be affordable for the taxpayer to shuttle to that position to procure the services and products.” In sure instances, a significant other’s shuttle bills may additionally qualify for an METC equipped a clinical practitioner has qualified the taxpayer can’t shuttle with out help.

A tax case determined previous in January concerned an Alberta taxpayer’s try to declare an METC of $853 for sanatorium parking bills that his spouse, a retired nurse, paid right through the 2018 tax yr. In that yr, the taxpayer’s spouse travelled thrice every week to procure kidney dialysis remedy at an Edmonton sanatorium. On a dialysis day, the taxpayer’s spouse would force from their house to the sanatorium, the place she would park the automobile, after which, upon of completion of her remedy consultation, force house, which used to be roughly 22 km from the sanatorium.

Article content material

The taxpayer testified that those dialysis remedies “have been life-saving and with out identical his partner would have died.” The taxpayer equated her parking expense to a clinical remedy expense as she wanted with the intention to park her automotive to obtain remedies and, thus, they will have to correctly be allowed as a clinical expense for the needs of saying an METC.

The taxpayer used to be necessarily difficult the 80-km distance requirement within the Tax Act as being discriminatory and opposite to the Canadian Constitution of Rights and Freedoms. “My spouse has to park to procure dialysis,” the taxpayer defined. “(The legislation) discriminates in opposition to individuals who must shuttle lower than 80 km for important clinical remedy” because it simplest lets in such parking bills to be deducted for those who shuttle more than 80 km to procure remedy.

Article content material

The pass judgement on became to the wording of the constitution itself, which, underneath the Equality Rights heading, states: “Each particular person is equivalent earlier than and underneath the legislation and has the suitable to the equivalent coverage and equivalent advantage of the legislation with out discrimination and, specifically, with out discrimination in keeping with race, nationwide or ethnic foundation, color, faith, intercourse, age or psychological or bodily incapacity.”

The pass judgement on mentioned this used to be no longer a case the place there used to be any discrimination between people because it pertains to claiming an METC. It’s true that the Tax Act specifies a limitation of “no longer lower than 80 km,” however this limitation isn’t in keeping with, neither is it carried out at the foundation of, variations of people themselves. It’s carried out at the foundation of whether or not any particular particular person travels lower than 80 km to procure clinical services and products. In different phrases, the act, which makes a difference for one-way shuttle distances of “no longer lower than 80 km applies similarly to any and all people in the hunt for to assert a METC.”

Article content material

The pass judgement on famous Parliament selected to acknowledge sanatorium parking prices (being a part of “affordable shuttle bills”) as a clinical expense for one-way shuttle of no longer lower than 80 km. However that doesn’t imply Parliament is discriminating by means of no longer granting the similar reputation of parking prices for one-way shuttle of any lesser distance. In spite of everything, Parliament is entitled to make such distinctions within the act for causes equivalent to “protective the fisc” with out it constituting discrimination.

“Parliament is underneath no legal responsibility to create a selected get advantages,” the Preferrred Court docket of Canada has in the past mentioned, “(and) is loose to focus on the social methods it needs to fund as an issue of public coverage, equipped the ease itself isn’t conferred in a discriminatory way.”

The pass judgement on, due to this fact, brushed aside the taxpayer’s declare for the METC, however selected to not award any prices to the Crown taking into consideration the instances.

Jamie Golombek, CPA, CA, CFP, CLU, TEP, is the managing director, Tax & Property Making plans with CIBC Personal Wealth in Toronto. Jamie.Golombek@cibc.com.

_____________________________________________________________

In case you favored this tale, join extra within the FP Investor e-newsletter.

_____________________________________________________________